Why the School Tax Levy is Key to Funding JCPS (and why seeking abatement funds is not a concrete solution).

I've heard "can't we go after the abatement money to fund our schools? Rather than increase the school tax levy?" The answer is: no, at least not directly.

I wrote about the intersection of abatements & school funding back in 2015; this current moment has been foreseeable for years, unfortunately our elected are only now feeling the pressure of the moment. In this pressure-filled moment, it's critical to anchor around facts.

Here's a quick breakdown of the logic:

The city's 2 biggest mechanisms of funding are (a) the city tax levy and (b) PILOT revenue from abatements.

1) City tax levy -- this is what Mayor Fulop and Council need approval EACH YEAR to pass. Each year they must pass a budget & sell to the taxpayers the NEED for the city levy to go up. This year, the city levy has gone up (based on initial budget documents from the city) by $20M ($260M to $280M). That spending should be justified - what are we paying for? What's going up? What's going down? Etc.

2) PILOT revenue -- abatements are contracts, and locked up. Abatements need ONE-TIME approval to pass, and that's already happened (when the abatements were granted by City Council). These are contracts and the City (not the BOE) is the party to the contracts along w/ the developer OR with the property owner (eg in the case of a condo).

Now let's look at it from the BOE side.

1) The BOE has state aid & the school tax levy. State aid is going down. Big picture: this means the school tax levy must go up. This is causing some to say "No -- can't we look at abatements instead?"

But again, the BOE has no contractual right to the abatements. This is not a concrete, viable path to obtain money for our kids in the next 1-3 months.

2) Here's what the BOE *can* do. They can explain to the public what the need is. Parents are pushing for the BOE to do just this. We *NEED* teachers, paras, social workers, counselors, enrichment programs. But we cannot access any of that we if lack the funds.

So...the BOE can force a dialog with the city. It can raise its own levy based on the NEEDS, and force the city to (a) then lower its levy OR (b) explain to taxpayers why taxes are going up.

This should be a dialog. Back and forth. Based on needs in our community.

We've seen announcements recently that there is a municipal budget on the table. Ok...that's a first step. Now, let's see what the BOE needs. Then -- let's figure out as a community where the priorities are. I'm a parent and I see the concrete needs in our schools. I hear politicos say "cut the fat in JCPS" - be it city officials or BOE officials - and it's a signal to me that they have ZERO understanding about what's really happening in our schools. If they did, they'd show more empathy for the fact that teachers are doing 3 jobs in 1, that our kids are rationing water, that at some high schools the kids can't play sports after school because there's only 1 sport available.

We need a clear, concrete path forward to fund our schools. The BOE can lead us there. But they must choose to lead & fulfill their mandate to fund.

For anyone curious about abatements: I wrote up a whole series on them here: https://civicparent.org/jersey-city-abatements-dashboard-for-taxpayer-advocacy/

For a primer on the school funding crisis in #JerseyCityhttps://civicparent.org/jcps/

2015 article re: PILOTs and school funding: https://civicparent.org/2015/11/17/jersey-city-pilots-rob-funding-from-the-school-system/

Q: How can spending go up but the tax rate stay the same?
A: the if the tax base grows at the same rate as spending, then the rate stays the same.

Here's a breakdown:

The tax RATE (what we use to compute our tax bill) is numerator & denominator math:

Tax Levy / Tax Base = Tax Rate.

If the tax levy goes UP, but the tax base goes UP at the same pace, then the rate will stay the same. Look at it through the lens of a quick, simple example.

1/2 = 50%

now let's double both the numerator and the denominator...

2/4 = 50%  (both the numerator and the denominator went up, but at the same pace)...so the rate stays the same.

Posted in JCPS Funding Crisis, Schools, Tax Abatements.