According to the new school funding formula, Jersey City is dramatically overfunded, but when you look around at our public schools that doesn’t seem to be the case. Our students are being provided with a high quality education, because we want to ensure the best possible outcomes for every child. The district spending is not extravagant or careless. Still, over the course of the next seven years the school system will be weaned off of $175 million in state aid. This will give the city three options going forward.
We could’ve left the school district to fend for itself. Force them make due with a third of their current budget, and leave them to cut programs and stagnate their technology adoption. We could’ve raised property taxes to replace the lost state aid with local funding, which would have added another anchor to an already overburdened tax. Instead, we chose the third option – to take advantage of statewide legislation which allowed the city to establish a payroll tax. It was the only option that would not hurt our schools or burden the citizens of Jersey City.
The payroll tax is designed to benefit the people of Jersey City. Its revenue will go strictly to our schools, investing in our future and allowing us to continue offering a quality education to the children of our city. It is a minimal one percent tax so the impact on individual businesses is miniscule but in total, it will bring in enough money to offset the lost state aid. Lastly, and possibly most importantly, the tax would not apply to the payrolls of Jersey City residents. This is huge for our city, as it will essentially incentivize hiring from within the city.
Jersey City has become an extension of New York City. We are home to countless large corporations with people traveling to the city from all over North Jersey and Southern New York to work here. Over 90,000 people commute into Hudson County every day. Unfortunately, none of those people are contributing to our tax base. While they spend their days in Jersey City, their property taxes are going to their hometowns. The payroll tax allows corporations to contribute to our community and invest in our children, our future.
The tax does not apply to residents of Jersey City, it is not simply a one percent tax on a company’s entire payroll, but rather a one percent tax on the salaries of people not living in the city. The benefit to residents is two-fold, the money will fund the school district without raising taxes, and it encourages companies to hire from our community. These companies offer high wage jobs and encouraging them to hire more people from Jersey City will continue to bolster our local economy. When more people live and work in Jersey City, more money gets reinvested into local shops and businesses, keeping the money here is good for all of us.
When I first saw the numbers for the new school funding formula my mind was reeling. I was determined, however, to find a way to continue offering our district a sufficient budget without penalizing the people of Jersey City. Raising taxes was never an option, it would only make the area less affordable and hurt the children and families I was looking to help. Cutting the budget was not a viable option either, as that, again, would hurt the public and make the city a less desirable place to live.
The payroll tax was then and still is, our best option. It is estimated to generate roughly $80 million a year which will soften the blow of the state funding cut and allow us to continue offering high quality education to all of our children. This is a long term, sustainable solution, with multifaceted benefits for our community. A one percent tax on a portion of companies’ payrolls is not going to drive business out of our city. For corporations, the additional tax is a drop in the bucket, but for the school district, the revenue will be the water that keeps it afloat.
Sandra Cunningham is a New Jersey State Senator serving the 31st Legislative District. She resides is Jersey City.
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