NJ loses $400 million in federal reform money for education

A last minute change on the State of New Jersey’s application for monies from a federal educational reform program, “Race to the Top” will cost New Jersey $400 million in federal funding this year.  Last minute wrangling with the state’s teacher union, the NJEA led to Gov. Christie yanking months of work on the application and redoing it just days leading into the deadline.

Education commissioner Bret Schundler

The last minute application had incorrect budget information with the wrong years; it contained 2011 instead of 2008 and 2009 requested, costing the state five points in the scoring system.  New Jersey missed qualifying for the federal funds by three points.

More recently, another New Jersey report concluded that tax abatement programs were costing many New Jersey cities millions in education aid.  Hoboken was highlighted in that report as losing more than $3.5 million in education taxes uncollected due to the formulas used.  Taxes are paid directly to the municipality but county and education taxes are not.

Hoboken residents currently pay about 30% of their annual tax bill for education in the district.

Many controversial tax abatements have been under review at City Hall.  It’s unclear what may come out of such a review but some time ago, one City Councilman on the mayor’s majority coalition recounted his inquiry on a building located in downtown Hoboken near the waterfront and felt it could and should be legally altered.

Tax abatements or PILOTs are very controversial in Hoboken.  They range from projects previously approved that went up in affluent areas to Church Towers, that received a ten year PILOT extension in 2009 with no means testing on its affordable subsidized units.

Related:  The Newark Star Ledger has the story on NJ’s reform application just missing out.  The $400 million is going to have strong reverberations.

The state report criticizes tax abatements listing Bayonne, Jersey City and Hoboken as examples of abuse.  You can link to the state 30 page report on the page here.

Photo: courtesy

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