Op-Ed Follow-Up: Get the Facts & Figures About Abatements & Public School Funding in Jersey City

I teamed up with Ellen Simon to co-author an op-ed in The Jersey Journal about how Jersey City’s PILOT policy harms our public schools. The article is dense with facts, figures, and assertions. To ensure our assertions are as accessible as possible to the public, I’ve created a landing page to help readers sort through the substantiation and the logic. Quotes from The Jersey Journal op-ed article are in large, blue font.  Our substantiation, including links to source documents, follows.  Admittedly, the text below is also, necessarily, a bit dense with facts and figures. But the goal is to provide greater transparency into our argument, which will in turn, we hope, yield greater engagement from the public.

“…the Fulop administration has managed to increase the city’s spending 10 percent during his term.

This was taken from the 2013 and 2017 city budgets, available online here. In 2013, total city revenues were $515,923,451.  In 2017, proposed revenues increased to $572,091,768.

% Spending Increase in Total City Revenues, 2013 to 2017:
($572,091,768 – $515,923,451) / $515,923,451 = 10.89%

“The increase in payments from abated developers accounts for more than half the city’s spending increase.”

If we look at the city budgets cited above, we see the following:

Increase in total city spending, 2013 to 2017:
$572,091,768 – $515,923,451= $56,168,317

2013 PILOT Revenues: $109,683,784
2017 PILOT Revenues: $139,436,697

Increase in PILOT spending, 2013 to 2017:
$139,436,697 – $109,683,784 = $29,752,913

PILOT spending increase as portion of total spending increase:
$29,752,913 / $56,168,317 = 52.97%

“The Fulop administration has granted about 70 abatements; more than 30 of which are long-term, lasting between 15 and 30 years.”

Jersey City publishes an “Abatement Tracker” for calendar years 2014 through 2016 on its “Open Data Portal”.  The document lists 63 abatements, but it is incomplete, with two notable gaps:

a) The “Journal Squared” 1, 2, and 3 abatements approved in November 2013 are not included in the “Abatement Tracker.”  These represent three separate abatement contracts, each 30 years in duration, for a total of 1,840 units.

b) The “Abatement Tracker” is current only through July 2016, indicating a multi-month lag in reporting to the public.

When we tally the abatements from the Abatement Tracker, the “Journal Squared” project, and abatements granted since July 2016, we exceed 70 total abatements granted by the Fulop administration.  Of those 70+ abatements, 34 are long-term abatements, i.e. the duration is 10 or more years.

These are the 31 long-term abatements listed in the abatement tracker:

  1. 360 NINTH STREET UR (364 NINTH ST) – 20 Years, 80 units.
  2. SENATE PLACE UR (25 SENATE PL) – 20 Years, 266 units.
  3. 160 FIRST STREET UR (160 FIRST STREET) – 20 Years, 159 units.
  4. ONE EXCHANGE JC, LLC (1 EXCHANGE PL) – 20 Years, 253 HOTEL ROOMS units.
  5. CHEESECAKE LOFTS UR (251 NEWARK AVE) – 10 Years, 19 units.
  6. LHN OWNER UR (33 PARK AVE) – 10 Years, 448 units.
  7. CAPAPJC #4 UR (326 PACIFIC AVE) – 20 Years, 12 units.
  8. COLUMBUS HOTEL UR (80 COLUMBUS DR) – 20 Years, 152 HOTEL ROOMS units.
  9. LEXINGTON MANOR OWNER LP (LEXINGTON AND BERGEN) – 30 Years, 152 units.
  10. 3 JOURNAL SQUARE UR (2 JOURNAL SQUARE) – 30 Years, 240 units.
  11. 234 SUYDAM AVENUE UR (218-240 SUYDAM AVE) – 20 Years, 83 units.
  12. MONTGOMERY GARDENS FAMILY PHASE I (561 MONTGOMERY ST) – 30 Years, 126 units.
  13. 17-19 DIVISION STREET UR (17 DIVISION ST) – 10 Years, 18 units.
  14. 170 LAFAYETTE UR (170 LAFAYETTE ST) – 20 Years, 46 units.
  15. SL HOSPITALITY UR (180 FOURTEENTH ST) – 20 Years, 87 HOTEL ROOMS units.
  16. RATAN JERSEY CITY UR (707 TONNELE AVE) – 20 Years, 75 HOTEL ROOMS units.
  17. DEVI MA NEWKIRK UR LLC (60-62 NEWKIRK ST) – 30 Years, 14 units.
  18. GENESIS OCEAN UR ASSOCIATES (79-81 DWIGHT ST, 445-457 OCEAN AVE) – 30 Years, 64 units.
  19. GS FC JERSEY CITY PEP 1 (474 WARREN ST) – 30 Years, 421 units.
  20. GS FC JERSEY CITY PEP 2 (444 WARREN ST) – 30 Years, 432 units.
  21. GREENLAND REALTY UR (136 SUMMIT AVE) – 20 Years, 19 units.
  22. KRE HAMILTON UR (431 MARIN BLVD) – 30 Years, 397 units.
  23. HUDSON MAIN HOLDINGS UR (143  CHAPEL AVE) – 20 Years, N/A units.
  24. 456 GRAND REALTY UR, LLC (460 GRAND ST) – 10 Years, 82 units.
  25. 305 WEST SIDE AVENUE UR (305 WESTSIDE AVE) – 20 Years, 39 units.
  26. PACIFIC 312 GROUP UR (314 PACIFIC AVE) – 20 Years, 14 units.
  27. 720-726 BERGEN AVENUE UR (280 FAIRMOUNT AVE) – 30 Years, 58 units.
  28. JOURNAL SQUARE LOFTS UR (2857 KENNEDY BLVD) – 25 Years, 40 units.
  29. 380 NEWARK REALTY UR (380 NEWARK AVE) – 10 Years, 45 units.
  30. HC WEST CAMPUS UR I (23 UNIVERSITY PLACE) – 10 Years, 163 units.
  31. HC WEST CAMPUS UR II (26 UNIVERSITY PLACE) – 10 Years, 167 units.

The chart below shows the three “Journal Squared” contracts and the 31 long-term “Abatement Tracker” contracts (34 total):

 

“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.”

Our op-ed requires a small correction. The 2017 PILOT monies are actually higher than we stated in The Jersey Journal; they are $139 million, not $138 million, in 2017.

I laid this out above, but just to reiterate, here is the data from the 2013 and 2017 city budgets:

2013 PILOT Revenues: $109,683,784
2017 PILOT Revenues: $139,436,697

Increase in PILOT spending, 2013 to 2017:
$139,436,697 – $109,683,784 = $29,752,913, a 27% increase

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

If we look at the 2017 city budget we see:

2017 PILOT Revenues: $139,436,697
2017 Total Revenues: $515,923,451

2017 PILOT Revenues as % of Total City Revenues:
$139,436,687 / $572,091,768 = 24%

“While the payments have fueled additional spending by city government, they’ve starved the schools…taxpayers elsewhere in the state have made up some of the difference…”

26% of the difference, to be exact. We looked at the Jersey City Public Schools budgets for 2013 and 2017 to substantiate this.

2013 Total State Aid: $488,542,305
2013 Total BOE Budget: $660,003,985
2013 Total State Aid as % of Total BOE Budget: 74%

2017 Total State Aid: $494,407,010
2017 Total BOE Budget: $682,237,528
2017 Total State Aid as % of Total BOE Budget: 72%

Total Increase in JCPS Spending, 2013 to 2017:
$682,237,528 – $660,003,985 = $22,233,543

Total Increase in State Aid to Jersey City, 2013 to 2017:
$494,407,010 – $488,542,305 = $5,864,705

% of Funding Increases Attributed to State Aid, 2013 to 2017:
$5,864,705 / $22,233,543 = 26%

Total Increase in Local School Tax Levy, 2013 to 2017:
$116,692,448- $108,336,848 = $8,355,600

% of Funding Increases Attributed to Local School Tax Levy, 2013 to 2017:
$8,355,600 / $22,233,543 = 38%

“If Mayor Fulop had kept his promise, the city’s district and charter schools would be getting an additional $46 million a year, according to data from the city’s budget.”

We based this on Mayor Fulop’s 2013 campaign promise:

“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.” 

If we allocate 33% of the 2017 PILOT fees to JCPS, we have the following:
$139,436,697 * 33% = $46,014,110

“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.”

It’s just shy of 1/3, at 30.35%.  This data is found in the city’s “User Friendly Budget,” a mandatory disclosure report that is filed by the city with the state.  Jersey City’s 2017 User Friendly Budget reports:

2017 Assessed Value of the Tax Base: $6,214,706,588
2017 Assessed Value of Current Abatements: $2,708,599,122

The tax base and the abatements constitute the “revenue-generating property” in the city.  The tax base is subject to property taxes, and the abatements are subject to PILOT fees.

Total Revenue-Generating Property in Jersey City is worth:
$6,214,706,588 + $2,708,599,122 = $8,923,305,710
(note: this is assessed value, not market value*)

Total PILOTs as % of Total Revenue-Generating Property in Jersey City:
$2,708,599,122 / $8,923,305,710 = 30.35%
Zero dollars from PILOTs are currently directed towards JCPS.

* 2016 Assessed value was 23.66% of market value, per the State Equalization Ratio as published by the NJ Division of Taxation.

Learn more about Jersey City abatements and how they impact our public schools:

  1. Jersey City PILOTs Rob Funding from the School System
  2. Jersey City, We Have a Problem.
  3. Abatements 501: A Critique of Mayor Fulop’s “Buy-Up” Policy
  4. What Does 1.88 Students Look Like?