The district had anticipated a $3.5 million loss of state aid for 2018-19 due to the state’s new funding formula. But a surprise came when the district lost an additional $1.8 million promised by Gov. Phil Murphy last March.
The loss of aid for the upcoming school year is only the first in a series of cuts the district expects over the next six years, reducing school aid to local schools by $175 million from the current aid of $410 million, something Board President Sudhan Thomas called unconstitutional.
“These draconian cuts are anti-constitution and severely undermine the board’s ability to further thorough and efficient education to the 30,000 children of Jersey City,” he said.
Faced with a choice between laying off as many as 71 people or possibly violating state budget mandates, the Board of Education voted on July 31 to seek permission from Hudson County Superintendent of Schools Melissa Pearce to spend emergency reserve funds to make up for a $5.3 million cut in state aid.
This means that board will still have to lay off as many as 25 people. But none will be full time teachers.
The board called the July 31 meeting to obey a state mandate to produce a plan to fill the budget gap by the end of July.
Cuts target former Abbott Districts
A revised state aid formula called S2 reallocates state school aid, taking massive amounts from what were previously called “Abbott Districts” – poor urban districts considered too inadequately financed to meet the mandate of a thorough and efficient education – distribute funding more widely among other districts.
Thomas said Jersey City may have to seek legal action to restore funding to satisfy a number of state Supreme Court orders to meet the “thorough and efficient education” mandate the state constitution requires.
In a series of rulings that date back to the late 1960s, the state Supreme Court said some urban districts did not provide the same level of education as wealthier districts. This resulted in a funding formula designed to help improve education for those urban districts.
In the 1990s, the state tried to satisfy the court mandate by establishing core curriculum standards. But the court continued to require the state to provide school aid and other programs. Earlier this year, Gov. Murphy agreed to modify the formula under pressure from state Senate President Stephen Sweeney, who claimed the formula was unfair to non-Abbott districts.
This is the most drastic change to the state aid formula since the first court ruling, and Thomas indicated, the district will likely go to court to challenge it.
“These draconian cuts are anti-constitution and severely undermine the board’s ability to further thorough and efficient education to the 30,000 children of Jersey City.” – Sudhan Thomas
The board choice of the least layoffs to meet the $5.3 million loss of state aid, however, will require approval by the county superintendant of schools, since it will reduce the emergency fund by half the amount required by the state.
Regina Robinson, business administrator for Jersey City schools, said the district has been in discussions with the county superintendent and has laid out various options. Robinson said the district could be allowed to reduce the emergency fund – called a fund balance – in the case of an emergency.
“The reduction in state aid could be considered an emergency,” she said.
This is the second year Jersey City has seen last minute cuts to in state aid. Last year, the state cut $8.3 million.
But the most severe cuts are expected to come over the next six years, with a cut of $25 million to $30 million expected for the 2019-2020 school year.
But he noted next year’s cuts will be worse because the district will face the same $75 million short fall in revenue that it faced this year. The district scrambled to fill the gap this year through a number of cost-cutting measures, averting a potential layoff of more than 300 employees.
“Next year, combined with the loss of state aid, we’re going to have to find a way to fill a shortfall of more than $100 million,” Thomas said.
Payroll tax could help offset future cuts
Legislation recently signed into law by Gov. Murphy will allow Jersey City to establish a payroll tax for companies with more than 25 employees to help fund the schools.
This could help offset some of the negative impact of the state aid cuts, if the city council introduces and adopts the ordinance.
Two members of the city council, Richard Boggiano and Michael Yun, spoke at the school board meeting, saying they supported schools, but did not specifically say they supported the payroll tax.
Board Trustee Matt Schapiro said the payroll tax is needed and hoped that the council would implement the full one percent tax on payroll that state law allows.
The council is expected to introduce the ordinance on at its Aug. 15 meeting.
Al Sullivan may be reached at firstname.lastname@example.org.