Mayor Solomon Releases Comprehensive Report Revealing $250 Million Budget Deficit Inherited from Previous Administration
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Mayor Solomon Releases Comprehensive Report Revealing $250 Million Budget Deficit Inherited from Previous Administration
Report documents years of fiscal mismanagement, one-time gimmicks, and depleted reserves that have left Jersey City in financial crisis
Deficit is equal to 28% of City’s operating expenses - 6 times larger than NYC’s deficit
Full report at JCNJ.ORG/BUDGET
JERSEY CITY, NJ (February 4, 2026) — Mayor James Solomon today released a comprehensive report detailing for the first time the full scope of Jersey City's financial crisis, revealing an approximately $250 million budget deficit for 2026—roughly 28 percent of the City's annual operating budget. The report documents how former Mayor Steven Fulop's administration systematically prioritized short-term political gain over the City's long-term fiscal health, employing a series of budgetary tricks and one-time gimmicks that have now run out.
The deficit comes despite favorable economic conditions, including a growing tax base, surging development, and the largest infusion of federal aid in American history during the COVID-19 pandemic. All three major credit rating agencies—Moody's, S&P, and Fitch—have downgraded Jersey City's credit rating in recent years, with Moody's characterizing the City as a "financially struggling city with deteriorating liquidity profile" in December 2025.
Mayor Solomon was joined by members of the Jersey City Council and the Hudson County state legislative delegation - signifying an united front in tackling the hole left behind by the former mayor.
"For years, Jersey City residents were told our city was thriving financially. That was a lie," said Mayor James Solomon. "The previous administration sold off our city's future—depleting reserves, selling public land, and using every trick in the book—all to avoid making honest decisions and to fuel one man's political ambitions. The bill has now come due. My administration will not repeat those mistakes. We will tell Jersey City the truth, even when it's hard, and we will build a responsible path forward that protects working families."
Key findings from the report include:
- Squandered COVID Relief: Nearly 70 percent—approximately $100 million—of the City's federal American Rescue Plan funding was used primarily to provide a one-time, election-year property tax cut in 2021, rather than for long-term investments.
- Depleted Reserves: The City's rainy day fund has been completely spent down from over $100 million just a few years ago to essentially nothing today—and is actually negative when excluding emergency borrowing.
- Short-Term Revenue: The City used a combined $667 million in unsustainable, one-shot revenue since 2019 - building instability into the City’s fiscal health.
- Massive Underbudgeting: The City systematically underbudgeted for known expenses, including over $52 million in unpaid health insurance bills from 2024 and 2025.
- Wasteful Spending: Nearly $20 million was spent on consultants for the Pompidou museum project with virtually nothing to show for it, including $7.5 million to a single architecture firm.
- Asset Sales: Almost 1,000 City properties were sold during the Fulop administration for at least $100 million, with $33 million used in 2025 alone to plug budget holes.
- Late Fees: Poor budgeting and cash management caused the City to be consistently late in paying large invoices - incurring significant penalties as a result. For example, the City has paid over $1 million a year for not paying prescription benefit invoices on time.
- Lost Taxpayer Money: The City overpaid state and federal taxes by $3.1 million and failed to request a refund before the deadline—that money is now unrecoverable.
The Solomon Administration has already taken steps to address the crisis, including hiring an experienced Finance Director and bringing in independent municipal budget experts from the City University of New York's Institute for State and Local Governance at no cost to the City. Last week, the Administration announced a switch in health insurance administrators projected to reduce expenditures by $30 million in 2026.
In the coming weeks, the Administration will hold community meetings across the City and work with state partners to develop a responsible long-term plan guided by clear principles:
- People over politics: Every choice will prioritize the residents of Jersey City—not political optics, not personal ambition.
- Always tell the truth: We will never try to hide the reality of the current situation from our residents, and we will keep Jersey City updated every step of the way.
- Lead by example: You won’t see any trips to Paris from the Solomon Administration. As the whole City is forced to tighten its belt, we will minimize extraneous expenses as much as possible.
- Fight to minimize impacts on working people: At every turn, we will work to preserve critical government operations that Jersey City relies on, and work to reduce the costs and the harm for our working families.
- Get Jersey City back to stability without tricks or gimmicks: Working with experts, we will create a sound long-term plan to get back to stability, without resorting to easy solutions that sacrifice the City’s future.
The full report is available at JCNJ.ORG/BUDGET.
Marc Shaw, Budget Expert, CUNY Institute of State and Local Governance
"Having worked through fiscal crises in multiple major cities, Jersey City's $254 million deficit for 2026 is both severe and urgent. What stands out in Mayor Solomon's approach is the commitment to transparency and truth-telling from day one. Too often, municipal leaders try to paper over these problems with the same gimmicks that created them. Mayor Soloman deserves credit for laying out the full scope of the crisis, and committing to sustainable solutions that provide for structural balance within the context of a 5-year plan.”
Marc Pfeiffer, Senior Policy Fellow | Faculty Researcher, Bloustein Local Government, Center for Urban Policy Research
"The transition team’s calculation of the City’s approximately $250 million deficit—representing 28% of its operating budget—is among the most severe fiscal imbalances we've seen in a New Jersey municipality in decades. This isn't just a cash flow problem or a temporary shortfall; it's a serious structural deficit that indicates a fundamental mismatch between ongoing revenues and ongoing expenses.
When one-time revenue sources grow from 4.5% to over 25% of a city's budget in just a few years, that's a clear warning that budgets are being balanced on paper rather than in reality. It is also inconsistent with the state’s local government policies and oversight model. The depletion of reserves, a downward spiral in its credit rating, and the accumulation of unfunded obligations all point to years of deferring difficult decisions. But the City’s fiscal fundamentals are sound, so the challenge can be met.
The path forward will require an all-of-the-above approach. Most importantly, it requires honest accounting, engagement of the Mayor and City Council, realistic projections going forward, and a laser-like focus on getting the basics of financial management right."