Jersey City

Interim Budget Report

A Progress Report on Jersey City’s Fiscal Recovery

Download Full Interim Budget Report
Download Statement of Outstanding Balances from the Fulop Administration

When the Solomon Administration took office in January 2026, it inherited a structural budget deficit of approximately $254.8 million — roughly one quarter of the entire municipal budget, and a shortfall without recent precedent among New Jersey municipalities. This report is an honest accounting of the steps the Administration has taken to close that gap in advance of introducing the City’s budget.

This shortfall did not appear overnight. Between 2019 and 2025, the City came to rely on roughly $667 million in one-time, non-repeatable revenue, drawing down reserves, selling public land, and borrowing to cover day-to-day operating costs. Known bills were pushed into future years: the City entered 2026 owing approximately $52 million in unpaid healthcare claims, and the 2025 budget had been balanced in part with $33 million in one-time land sales that cannot be repeated. All three major credit-rating agencies downgraded Jersey City over this period. The result is a deficit that is structural, built into the City’s ongoing finances, rather than the product of any single year.

In its first months, the Administration moved deliberately to understand the full scope of the problem and to begin solving it:

•     It commissioned an independent review of the City’s finances, which produced the February 2026 Financial Emergency Report documenting the full extent of the deficit.

•     It engaged outside budget experts from the CUNY Institute for State and Local Governance and appointed a new Finance Director to develop a plan to restore structural balance.

•     It began closing the gap immediately. Administrative actions have reduced the deficit on a net basis by approximately $55 million, lowering the remaining structural gap to roughly $199.6 million.

Despite significant inflation and rising healthcare costs, our hard work will result in introducing a budget that cuts from the Fulop 2025 budget by at least $16 million. Unfortunately, the City must pay approximately $109 million in unpaid bills incurred under the Fulop Administration, but never paid for. These unpaid bills break down into three key categories: 

• Unpaid bills not budgeted for: VIA, funds for settling lawsuits, and principal and interest payments on debt: Approx. $40 million

• Government services overspending, healthcare, retirement costs, holiday and comp time, and tax appeals improperly paid for through borrowing: $59 million

• Retroactive pay for union contracts the previous administration let expire: $10 million

In total, the 2026 Jersey City operating budget will come to approximately $765 million for a total of approx. $874 million when including unpaid bills.

The Administration’s strategy to balance the City’s budget rests on three pillars, each described in this report: cutting costs, generating non-tax revenue, and securing state assistance, which together hold any tax increase to the lowest responsible level.

In March 2026, the Mayor directed every City department to identify immediate savings achievable within the current fiscal year and to chart a path toward up to a 10% reduction in operating costs over time — all without compromising the core services residents depend on. Overall, the City has secured $55 million in savings through these efforts.

Savings Secured

•     Ending wasteful commitments. The Solomon Administration reduced spending by: 

• Ended the Centre Pompidou museum project, which had already consumed more than $20 million in consultant and licensing fees for a museum still years from opening
•  Withdrew from an annual $2 million commitment to funding the county-wide Liberty High School.
• Reducing spending on the Via microtransit service by at least $3M annually that was previously improperly paid for with capital funds
• Health insurance — the largest single measure. Effective March 1, 2026, the City switched its benefits administrator from Horizon to Aetna, reducing costs by approximately $25.8 million in 2026 with no reduction in the coverage employees receive.

• Healthcare Claims Audit. A dependent-eligibility audit and a full claims audit are underway to ensure the City stops paying for ineligible enrolled.
• Mayoral Salary. Mayor Solomon believes in leading by examples and is taking a $1 for 2026.

Operational Discipline

• Directed department leaders to reduce spending by 10% over time through efficiencies and cost-cutting that will not harm public services.
•  Limiting public-safety overtime, eliminating vacant positions, and tightening staffing practices: at least $3.5 million in savings.

The Numbers Behind the $55 Million

The Administration has identified $83.2 million in gross savings through the measures below. After accounting for $28.2 million in offsetting cost increases surfaced during the financial review, the net reduction to the deficit is approximately $55 million.

Figures reflect administrative actions taken through the second quarter of 2026 and remain subject to final budget adoption.

The Administration’s guiding principle is straightforward: before asking residents to pay more, the City must collect what it is already owed and ensure that everyone pays their fair share – especially developers and corporations. The initiatives below are projected to generate at least $15 million in new recurring revenue annually. -.

Updating Fees Paid by Developers and Corporations

•     Construction and permit fees. Updating fees to reflect the true cost of service, paired with an initiative to cut red tape so projects move faster.

•     Hospitality and housing. Evaluating the hotel occupancy fee, short-term rental fees, and a vacant-property registry that charges owners who leave buildings empty.

• Parking. Reviewing and adjusting meter, permit, and lot-license fees, many of which have not been updated in years.
• Signage & Billboards Study: The City is assessing current fees and taxes on signage and billboards.
• Bulk Water Rates – The MUA is assessing the rates it sells water to other municipalities.

Enforcement

• Camera-assisted enforcement. Implementing Camera Assisted Parking Enforcement now and pursuing red-light and speed-camera programs through state legislation — measures that improve street safety while capturing revenue the City currently forgoes.
• Rebuilding Traffic Enforcement. Under the prior administration, Jersey City disbanded the JCPD Traffic Enforcement Unit. Rebuilding the unit makes our streets safer and brings in more revenue
• Modernized code enforcement. The City is expanding municipal court capacity, deploying modern case-management software, and pursuing collections on docketed judgments to clear a backlog of roughly 50,000 compliance items. In practical terms, violations that the City has long been unable to process, and the revenue attached to them, will finally be collected. For scale, neighboring Hoboken collects several million dollars a year through comparable enforcement.

Abatements and Assets

• PILOT Audit. An audit of existing tax abatements and an analysis of revenue recovery from payments in lieu of taxes, alongside the Mayor’s proposal to direct 10% of PILOT revenue to Jersey City’s public schools for the first time.
• Reverse Tax Appeals. The City worked with an independent law firm to identify properties that were potentially under-assessed previously, and sued to increase the assessments.
• Interconnection Fees. The Municipal Utilities Authority (MUA) updated the fees it charges developers for connecting to the water and sewer system for the first time in 25 years.
• Horizon claims audit. The City is currently auditing health claims paid by our previous health insurance administrator to address any overbilling that may have occurred under the City’s previous health insurance administrator.  

• In-House Trash Collection. The Department of Public Works is studying the feasibility and cost savings associated with bringing parts of the city’s trash collection services in-house.
• Expanding Grant Submissions. In 2025 Jersey City applied for $18.2 million in grant funding. In the first two quarters of 2026, Jersey City applied for $54.6 million in grants.
• Unclaimed Revenue. Through improved financial controls, the City has identified unclaimed revenue left in outside accounts, for example $850,000 from the turnpike authority and $100,000 in unclaimed properties.

Closing the remaining gap responsibly requires partnership with the State. The Administration is pursuing a state financial-assistance package of approximately $120 million — not as a bailout, but as an investment in a city that is a disproportionate contributor to New Jersey’s economy.

The Tools Being Pursued

• Transitional aid
• Zero or low-interest loans modeled on the precedents established for Atlantic City and Newark.

The Case to Trenton

• Jersey City generates an estimated $1.3 billion each year in state income, sales, and business taxes — roughly 3.1% of New Jersey’s major tax collections from 3% of its population.
•  The city’s growth has given the State roughly $400 million more in annual revenue than it would otherwise have received.

What Is at Stake if Aid Falls Short

Without sufficient state assistance, the burden falls on residents and the City workforce. Every $30 million shortfall in aid adds roughly 175 to 180 layoffs and about four percentage points to the required tax increase. Tax increases above approximately 30% would render most new mixed-income and affordable housing financially unviable — stalling thousands of units and costing the State $70 million or more each year in lost revenue.

Building the Coalition

• Engaging the Governor, the Hudson County delegation, and the congressional delegation — including pursuit of federal appropriations the prior administration never sought.

The Administration’s goal is to introduce a detailed budget to the City Council on July 15, with passage aimed for early August.

The three levers outlined in this report — administrative savings, non-tax revenue, and state assistance — combine to close the remaining $199.6 million gap while holding any tax increase to the lowest responsible level. The choice before Jersey City is not whether the inherited deficit will be closed, but who absorbs the cost. The Administration’s plan is designed to protect core services, public safety, and the City workforce while honoring the obligations Jersey City inherited.

The Administration will continue to report its progress openly and will deliver a plan to restore lasting structural balance to Jersey City’s finances.