Why Jersey City schools nearly had to lay off hundreds of employees

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JERSEY CITY -

Jersey City Board of Education officials backed off a threat to lay off over 400 teachers and employees after a series of contentious public meetings.

A budget crunch like this is not something one would expect to see in a city where the tax base has been undergoing explosive growth.

Luxury condos towers and office skyscrapers have been popping up for years in the city, so there would be reason to believe that the city is receiving a lot of tax money. However, this is not the case. The developers of these properties typically do not pay any tax money to the city’s schools.

One such development project is Journal Squared. This project was granted tax abatements by the city that allows them to make payments in lieu of taxes or pilot payments each year. About 95% percent of that money goes to the city – 5% percent goes to the county. None of that money goes to schools.

RELATED: Parents, teachers hopeful Jersey City can stop school layoffs 
RELATED: Parents, students pack public meeting about Jersey City school budget 

Similar situations happen all over the city.

“Jersey City’s quote-unquote renaissance has not been a renaissance for the schools. The schools have been left behind,” says parent Brigid D’Souza, a CPA who started the blog “Civic Parent” to keep track of the effects the abatements have on the city’s schools.

D’Souza says that there is about $10 billion in development that is abated and does not pay school taxes.

“I think if you’ve been following abatements and following Jersey City, this has been foreseeable for quite some time,” she says.

The city and school officials are doing two things to try and fix this: A new payroll tax, and they're suing the state for reducing state aid to Jersey City.

Board of Education officials said those layoffs will hopefully be avoided by using proceeds from the new payroll tax and a last-minute plan to sell the building that houses the Board of Education.

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