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More than 200 education jobs cut, including 150 teachers and 23 vice principals. Class sizes would balloon. Art and music classes would be erased.

The budget proposed by the school board in Paterson, the third largest city in New Jersey, offered a staggering package of cuts. Officials said they have no choice but to make the cuts that stand to undo years of gains by the long-struggling school district.

The board’s recent vote has plunged this economically distressed city into a wrenching debate about how its schools are funded, who controls the education of its nearly 29,000 public school children and what it will finally take to lift Paterson — a once-thriving industrial center — from its bleak past.

“The upsetting thing about it is the district was in a rebound,’’ said Rosie Grant, the executive director of the Paterson Education Fund, a nonprofit advocacy group. “They have put in early reading programs, math programs, different interventions, and we were seeing some results from that.

“All that will be erased.”

Paterson is one of four poor-performing districts that were taken over by the state starting in 1989, after officials determined that the school systems had fallen into educational bankruptcy with dismally low test scores and poor high school graduation rates. Newark and Jersey City have since regained control of their schools, but Camden and Paterson are still under state oversight.

Despite the worry that has gripped Paterson, some officials questioned whether the district’s threatened cuts were meant to try to force the state to provide more financing. Two years ago, the school board said it would lay off about 96 teachers, according to reports, but ultimately 25 teachers ended up losing jobs.

Last year, Paterson and the state entered into a two-year agreement that would return the schools to local control provided it met specific benchmarks, such as improved scores on standardized state tests and higher graduation rates.

The move, education advocates said, was in part a recognition that state control of districts should not be an open-ended process and that local school leaders are in the best position to understand the needs of students.

By some measures Paterson has succeeded: Almost 85 percent of students graduate from high school, up from a 46 percent graduation rate 10 years ago. The positive trajectory comes in spite of the high number of children from families that are below the poverty level; 97 percent of Paterson’s students qualify for free or subsidized school lunches.

But the formula New Jersey uses to distribute school aid has left many local districts underfunded. Over the past decade, Paterson officials said the city’s 54 public schools have accrued a $280 million shortfall in state aid, forcing the district to cut more than 500 education positions between 2010 and 2017.

As part of the deal to regain control of its schools, Paterson had to agree to balance its $526 million budget, prompting the school board’s 6-to-3 vote in favor of the proposed cuts. In addition to the loss of 150 teachers and 23 vice principals, the board has also proposed the elimination of 11 support staff members, 29 supervisors and five school directors. Another 44 positions that are vacant would not be filled.

The layoffs would save an estimated $22 million, and reduce the number of teachers by about 6 percent, officials said.

“I’m worried,” said Kieanna Pace Jr. 17, a junior at the city’s Eastside High School. “They’re leaving us with nothing.”

Officials and advocates said it was unfair for students’ education to suffer because of a lack of state funding.

“We’ve been underfunded for a very long time,” said Oshin Castillo, the president of Paterson’s board of education. “The fear is that if we continue at this rate, it is going to end up taking local control away. We can’t educate our students if we continue to cut teachers.”

Gov. Phillip D. Murphy, a Democrat who campaigned on a promise to fully fund the state’s public schools, has slowly raised local aid since he took office last year. He has proposed another increase in the new budget.

“There are few higher priorities than ensuring a high-quality education for all New Jersey students,’’ said Alyana Alfaro, a spokeswoman for Mr. Murphy. “This is just the beginning of a process that over the next several years will ensure that public school districts throughout New Jersey receive school aid based on objective criteria.’’

The superintendent of Paterson’s schools, Eileen Shafer, who was appointed by the board last year, said part of the challenge is that much of the funding the district does get from the state is directed to charter schools. That leaves little money for students in the rest of the city’s schools, which Ms. Shafer said “get scraps.’’

While charter schools play an important role, she said the way money is disributed “has to change.’’

Cutting educators to meet budget goals as part of Paterson’s effort to regain control of its schools could backfire, said Matt Frankel, a consultant to districts across the state, including Newark, which regained control of its schools last year.

“There is a very strict point of view by the state of what a school district has to do, both when it comes to the economics and their ability to teach kids,’’ said Mr. Frankel. “That is a big part of the state’s decision to return them to local control.’’

“But how you do it matters, too,’’ he added. “Creating draconian cuts — cuts that are going to have deep effects on kids — or money that is going to be taken away from classrooms, would be a significant issue.”

Standing outside Eastside High School, Christopher Capellan, 16, a sophomore, praised his teachers and said he feared what might happen if the proposed budget is adopted.

“For students,” he said, “it’s not going to be good.”

Nate Schweber contributed reporting.

Follow Sarah Maslin Nir on Twitter: @SarahMaslinNir

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