Jersey City Councilman-at-Large Rolando Lavarro, a potential mayoral challenger this fall, plans to introduce a resolution calling for a payroll tax collection audit for the past two years at next week’s meeting.
“Government at all levels are faced with huge budget challenges due to COVID-19. This is especially true for our Jersey City Public Schools who are facing a budget crisis,” Lavarro said in a statement.
“We need to recognize this dire reality and take actions that are consistent with meeting this crisis head on.”
On Wednesday, January 27th, the city council was expected to vote on adopting amendments to the Water Street Redevelopment Plan, a mixed-use, three-phase, 621-unit project along Route 440 that has been in the works for over two decades.
Prior to the meeting, Lavarro questioned if the developer, Fields Grade Development Company, not being up to date on their payroll taxes.
While it turns out they were paid up, a related company, Katerra, was not, though counsel for the project, Jim McCann, said in an email to the city council last week obtained by HCV that Katerra “does not own an interest” in Fields Grade Development.
However, Fields Construction merged with Katerra back in 2018.
Ultimately, the council voted unanimously (9-0) to table the matter for at least two weeks to give the plan further consideration.
Lavarro indicated that he felt this could be a sign of a larger problem and called for fines for all businesses that are found late on their payroll taxes.
“I’m also asking that penalties be assessed for not paying those payroll taxes. If anybody else, any homeowner did not pay their taxes, their property taxes, or any small business didn’t pay their payroll tax, they would be assessed penalties as well. I hope they will be substantial as well,” he added.
A draft of the proposed resolution notes that the city council approved a one percent payroll tax for local businesses to allocate to the public schools in November 2018.
The measure also cites an HCV report from the following year that indicated that the board of education lost out on millions of dollars due to inaccurate (PILOT) billings, according to an operational efficiency audit that was commissioned by the BOE.
Then, one year ago, Mayor Steven Fulop said the city would review all 178 PILOT deals to ensure the public schools were receiving the maximum benefits possible from the payroll tax.
The council subsequently approved contracts for auditing firms to perform this task, but those results haven’t been released to date.
Therefore, the resolution asks the city’s Department of Administration, Division of Audit, to report the findings of their PILOT audit, conduct an audit of the city’s payroll tax collections, and allocating all revenues found to the BOE for the current scholastic year.
Fulop said he’s in favor of supporting the payroll tax, though Lavarro’s motivations should be called into question.
“Auditing the payroll tax is always a good thing, and we’re supportive of this,” city spokeswoman Kimberly Wallace-Scalcione said.
“However, It’s hard not to be cynical about Councilman Lavarro’s intentions as his track record on this issue is clear; first, he opposed the payroll tax to shield the developers from paying anything, then he tried to have the payroll tax sunset after only 2 years to protect the developers, he then aligned himself politically with the developers during the Board of Education election to try and get them seats on the Board of Education.”
Lavarro will likely be hard pressed to find five votes for the local legislation on February 10th, given that his bad blood with Fulop has alienated him from most of his council colleagues, seven of which who are running on the mayor’s re-election ticket.
Editor’s note: This story was updated with a comment from city spokeswoman Kimberly Wallace-Scalcione.