Big cuts in school spending and three years of school tax hikes would be in store in Jersey City under a comprehensive financing plan unveiled by Mayor Steve Fulop on Tuesday.

Fulop’s plan, which he announced alongside Councilman Michael Yun, calls on the district to raise school taxes by $25 million in each of the next three years and make $45 million in budget cuts.

Fulop says the plan will save the school district $250 million by 2022 and solve a budget crisis sparked in part by a massive change in the state funding formula. New Jersey’s second-largest school district will lose at least $175 million over a seven-year period that began in 2018.

Jersey City’s auditor said Tuesday that if school taxes are raised by $25 million, the owner of a home with an average assessment of $440,000 (the 2019 average) would pay an additional $101 in school taxes. Last year, when the Board of Education raised school taxes by 10%, or $12 million, board officials said the owner of a home with an average assessment of $439,000 would pay an additional $155 in school taxes.

School taxes are one of three components of a homeowner’s property tax bill. The others are municipal taxes and county taxes.

"We have always said that we would do our part and show leadership by putting forward a plan,” Fulop said. “The students and teachers are the number one priority here. The next step is we need a basic action plan from the Board of Education. This plan from the city will deliver $250 million toward fixing our public schools.”

Fulop added that if the BOE adopts his plan, he will rescind November’s referendum asking voters whether the city’s elected school board should be converted into an appointed body.

In a letter sent to Fulop on Tuesday, BOE President Lorenzo Richardson said the city’s primary focus should be guaranteeing tens of millions in revenue from the payroll tax created to offset the state aid cuts.

The district, which educates more than 30,000 students, lost $27 million in state aid last year and anticipates losing $72 million in 2020-2021.

“Our focus is on fully funding the budget which is our responsibility as board members,” Richardson said in his letter to Fulop. “We can have a separate conversation about the appointed board vs. elected board, but I do not think a referendum to appoint a board …. should be used as a threat over this board or the budget process.”

When asked what he thought of the plan, Richardson simply replied, “not good.” He said the proposal doesn’t provide the school district enough funding, but he does like the idea of the Jersey City Municipal Utilities Authority overseeing the lead remediation of schools, saving the district $13 million.

The city will implement its own austerity measures, including a pay freeze for some city employees, a cut in recruitment of firefighters and police officers, and a reduction in overtime payments. The budget cuts will save the city $10 million, money that can be remitted to the BOE, Fulop said.

He pointed to the district’s forensic audit, which recommended a number of measures to cut costs, including laying off 71 district employees, switching the district’s healthcare to a self-insured plan, and getting a fair share of tax abatement revenues.

“They need to be doing things similar to what we are doing,” Fulop said, noting the BOE should consider pay freezes, buyouts, and staff reductions at the central office. “We have been talking to them and we think that number is manageable, that was a small number that was highlighted in their own audit.”

Fulop’s plan would see the city share more tax abatement revenue with the district, bringing $40 million to the schools over the next three years. The plan also calls on the BOE to sell its central office building on Claremont Avenue to the city and then lease it back for $1 per year – a move Fulop says would save the district $15 million over the next three years.

Richardson told The Jersey Journal on Tuesday the district does not plan to sell its central office, despite it being part of a plan to fill a budget hole last year.

Jersey City spokeswoman Kimberly Wallace-Scalcione said how much homeowners’ tax bills increase is up to the members of the BOE.

“While the BOE’s only plans so far have been to rely on tax increases to plug their budget gap, the mayor’s plan is drastically less reliant on taxpayers.”