By Brigid D'Souza and Ellen Simon



Mayor Steven Fulop completed a six-ward speaking tour in March, reminding each night's appreciative crowd that his administration didn't raise taxes the previous year.

Yet the Fulop administration has managed to increase the city's spending 10 percent during his term.

It sounds impossible. How did he do it without raising taxes more?

Fulop has credited an increased property tax base, more municipal court fines and more revenue from hotel taxes. But that's just part of the story.

The bigger part is increased payments from abated developers. (Which, in fairness, he's also credited.) The increase in payments from abated developers accounts for more than half the city's spending increase. Those increased payments are the No. 1 reason the city has been able to spend more without raising taxes.

What Mayor Fulop hasn't said: Those payments shortchange the city's public schools.

It's a tactic that will eventually affect either the quality of our schools, or the amount city residents pay in property taxes -- or both.

Abated developers make a payment to the city, called a payment in lieu of taxes (also known by an acronym, PILOTs). Unlike conventional property taxes, which the city government must share with public schools and the county, the city keeps 95 cents on every dollar of the payments in lieu of taxes for itself.

Our schools, however, get nothing.

Even though the revenue the city gets from abated property is lower than revenue from property paying conventional taxes, the tax breaks make financial sense for the city, because the city, under law, is able to keep 95 cents on the dollar.

The Fulop administration has granted about 70 abatements; more than 30 of which are long-term, lasting between 15 and 30 years. The annual payments the city gets from abated developers have increased by 25 percent during Mayor Fulop's administration, growing $28 million from roughly $109.7 million in 2013 to $138.1 million in 2017, according to data from the city budget.

Payments from abated developers are now nearly one-quarter of the city's entire budget.

The additional $28 million a year provided more than half of the city's annual revenue increase during the Fulop administration.

While the payments have fueled additional spending by city government, they've starved the schools. Although taxpayers elsewhere in the state have made up some of the difference, that can't go on forever: School funding is now a statewide issue, with Jersey City the top example of a district that can and should pay more -- but doesn't.

As a candidate for mayor, Councilman Fulop recognized the problem, promising in 2013 that if he were elected, payments from abated developers would be shared with schools.

"The City's tax abatement policy has long robbed the school system of necessary resources. New real estate development tax revenue should be allocated in equal proportions to the County, City, and Board of Education. Instead, the City allocates 100% of revenue collected through tax abatements for municipal expenditures. Under Mayor Fulop, the policy will immediately change," he said.

Unfortunately, that didn't happen.

If Mayor Fulop had kept his promise and given one-third of abatement payments that kicked in since the beginning of his term, it would mean an additional $9.3 million a year for our schools. If the schools were to get one-third of all abatement payments, which we need, after nearly a decade of flat funding from the state, that would result in an additional $46 million annually.

Instead, Mayor Fulop nodded to his campaign promise only last month, promising 10 cents on the dollar from future abatements granted to the schools. At the moment, that will mean zero dollars for the coming school year.

The abatements have not only starved our schools of needed funds, they've also undermined the fairness of our tax structure.

According to the 2017 city budget, $2.7 billion, or one-third of the total property in Jersey City by value, is covered by a long-term abatement, paying nothing to the schools.

Let that sink in: One-third of the property in the city, by value, pays zero dollars in school taxes.

Properties with long-term abatements won't be part of the schools' tax base for decades. For instance, the recently opened 53-story Journal Squared building won't pay a dime of school tax until at least 2047.

City leaders seem to think that our public schools can simply raise school taxes if they face a shortfall. This is not true. Under most circumstances, if the school district ever has to raise taxes more than two percent in a given year, it must, by law, put the proposed tax increase to a vote. Who would vote to increase their own taxes, knowing one-third of the property in the city -- owned by wealthy developers -- pays nothing to the schools? Any such increase would be, politically, dead on arrival.



Our public schools are a public responsibility. They are a responsibility that all of us should share -- from the shiniest highrise to the tiniest bungalow.



While we appreciate the mayor's promise to share a dime of every dollar from future payments from as-yet-ungranted tax breaks with our schools, the fact is that he ran -- and won -- on the promise of doing much more.



Starving our public schools is not a viable long-term policy. Our schools need, and deserve, one-third of the payments all abated developers make to the city. It is long past time for Mayor Fulop to keep his promise to our schools.