Paterson has been under increasing fiscal stress over the last few years, as the state has been unwilling and unable to give Paterson much in the way of additional state aid and Paterson has kept its own tax levy flat for seven years.
Last year, facing $497.8 million in expenses and just $472 million in revenue, Paterson considered raising taxes by 13% (or $5 million), but the Paterson BOE decided to make deeper budget cuts rather than increase taxes at all.
Now, despite making over 330 layoffs last year (including 170 teachers), the Paterson Public Schools are facing a $45 million deficit for next year and getting only a proportionally tiny increase in state aid. At this point Paterson's superintendent is suggesting that Paterson raise taxes by 27.2%.
A 27.2% tax increase would be enormous for most other districts, but Paterson's school levy is only $39 million, so that 27.2% tax levy increase only translates into an additional $10.2 million. Since Paterson's budget for 2016-17 is projected at $483 million, the additional $10 million is barely even a band-aid.
Paterson's BOE and municipal elected officials are aghast at the prospect of any tax increase. "We just can’t afford to increase taxes at this time,” said board member Nakima Redmon."
Paterson City Council president William McCoy called the increase "outrageous" and then added “This is a horrible idea. It’s not workable.”
This opposition to the tax increase is due to the fact that municipal taxes are also increasing by 6% ($9 million) and because Paterson continues to suffer significant economic weakness. As a symbol of that weakness, Paterson is continuing to lose Equalized Valuation even as the rest of New Jersey slowly grows.
Patersonians are venting fury at the state for not giving them more state aid:
Assemblyman Benjie Wimberly, who works for the school district as recreation coordinator, urged the protesters to take their fight to Trenton. “There’s a man by the name of Chris Christie who needs to hear loud and clear that the city of Paterson cares about their children and cares about their schools,” Wimberly said.
The Rev. Kenneth Clayton, president of the Paterson Chapter of the NAACP, called the state’s lack of funding of Paterson’s schools a “plot and plan” by officials in Trenton against the city.And:
The people of Paterson have a valid argument about state aid, but only up to a point because two-thirds of NJ's districts do not get "what they're entitled to under the law." In fact, Paterson gets 91.8 % of its uncapped aid ($401 million of $437 million), compared to the state median of only 80%.
“We can’t just sit back and accept this,” said Grant. “We have to push to get what we’re entitled to under the law.”
It would be nice to provide Paterson with more money, but Paterson's aid deficit is smaller than the aid deficits of some of its high-FRL neighbors no matter how you examine it.
Since it does so much better with state aid, Paterson's per pupil spending is higher despite having lower local taxes.
Although the people of Paterson are burdened, Paterson does not come close to paying its full Local Fair Share.
Paterson's taxes are especially low compared to its neighbors.
Paterson's schools also have some management and contractual problems. For instance, prescription drug costs for Paterson employees increased at a 50% rate this year.
The budget situation in Paterson is serious and will surely become worse in the next few years, but the state and Paterson itself should keep a broader perspective and realize that they get substantially more aid than poor non-Abbotts AND state-funded Pre-K which relieves parents of a major personal expense. A family in Prospect Park could be living three blocks from the Paterson border and have the same poverty, higher taxes, even less well-equipped and staffed schools, and have the large burden of paying for Pre-K itself (or doing without Pre-K at all).
Fairness in state aid should be for the most underaided, not districts who happen to be falling from what is comparatively a very high spending level. As painful as it is, Paterson must be finally willing to accept some increase in its Local Tax Levy and that other districts are ahead of it in line for more state money.
UPDATE: The tax increase proposal is now in the 12-15% range for Paterson.