Jersey City's underfunded public-school system could see a major boost under a plan devised by state Sen. Sandra B. Cunningham.

Cunningham, D-Jersey City, has proposed a 1 percent payroll tax on Jersey City businesses, with the revenue intended for the 29,000-student school district. The tax would mirror one in Newark that brings in about $48 million annually.

The plan, which was introduced in the state Legislature on Monday, comes amid rising panic locally that the school district may lose a significant amount of state financial aid and grumbling statewide about the amount of state funding Jersey City schools receive. The district's $660 million budget is funded with $414 million in state aid while Jersey City taxpayers kick in $124 million.

The district's overall budget is about $100 million less than what the state calls an "adequacy budget," the amount the state believes it would cost to provide a "thorough and efficient education" to every pupil. Local taxpayers pay about $200 million less than the district's "local fair share," the amount the state says local taxpayers can afford to pay for their schools.

There's nothing in the introduced legislation (S-2581) that refers to schools, but Cunningham said it will be amended. Sen. President Stephen Sweeney, a frequent critic of the amount of state aid Jersey City receives, supports the legislation, a Sweeney spokesman said.

Cunningham could not say how much the tax would rake in, but she said it "would be enough to take care of the woes in our school system."

The plan would allow any New Jersey municipality with a population over 200,000 — only Newark, which already has a payroll tax, and Jersey City apply — to levy the payroll tax. The city would be allowed to exempt wages from Jersey City residents.

It is the second tax plan under consideration that would affect Jersey City. The city has also proposed a new tax that would fund local arts (state lawmakers and voters must approve that proposal). Businesses in six districts citywide already pay an additional tax to fund special improvement districts.

A request for comment from a Jersey City spokeswoman was not returned.

"The proposed payroll tax is a unique and creative work around to help fully fund Jersey City schools," Jersey City Board of Education President Sudhan Thomas said in a statement. "We are hopeful the state Legislature will come to an agreement and help us to extend the constitutionally mandated thorough and efficient education."

Terrence T. McDonald may be reached at tmcdonald@jjournal.com. Follow him on Twitter @terrencemcd. Find The Jersey Journal on Facebook.