A couple of weeks ago, the Jersey City Council unanimously approved a new 1% payroll tax on businesses operating within the city. The tax, which will be paid by the businesses and not by employees, is being earmarked to address a financial “crisis” within the Jersey City school district. The “crisis” was created when the state legislature made the decision to eliminate a $175 million earmark in the state budget for the Jersey City School District. There’s more to come however, as the new tax was challenged this week in the courts as a violation of the state constitution by a real estate developer along with two labor unions and other plaintiffs. The suit alleges that the tax is illegal because the New Jersey constitution provides that property tax revenue combined with state aid for poorer districts is the only valid source of education funding. The suit asks that the tax, which was to begin January 1, be enjoined until the challenge is decided by the court.