Jersey City, New Jersey - view from the Hudson River by Jakub Hałun is licensed under the Creative Commons Attribution-Share Alike 4.0 International license
Have you ever had a friend who was bad with money and kept asking you to spot them some cash? Now imagine that instead of a friend, it was the second-largest city in the state of New Jersey, and instead of a $10 or $20 bill, it was a $255 million bill? That is what New Jerseyans across the state are experiencing with the current Jersey City budget fiasco.
The culprit of this structural budget deficit? Much of the structural budget deficit can be traced to fiscal decisions made during Mayor Steven Fulop’s administration from 2013 to 2026.
This crisis was coming sooner rather than later. In December 2025, Moody’s, the analytic firm, downgraded Jersey City’s credit rating. This is because of the city’s growing reliance on short-term notes to fund key mandates due to consistent underbudgeting, including tax appeals and health insurance claims. This ballooned Jersey City’s leverage to 470% of its revenue, placing it in a financially precarious situation.
Issuing short-term notes was not the only way Jersey City engaged in unsustainable revenue increases. Many of these were one-time revenue raisers, such as selling off city-owned properties and COVID-19 relief funds. These one-time revenue raisers grew from small additions to necessary parts of the budget, becoming 25% of Jersey City’s budget. These one-time revenue boosters masked the financial instability that was growing in Jersey City.
Even with the revenue raisers, the money ended up squandered. This includes $20 million spent on consulting and licensing for a proposed French museum that will not be built. This money could have been spent on the growing obligations facing Jersey City, such as healthcare bills, severance pay, and tax appeals, all of which have come to roost in this budget. The financial mismanagement in Jersey City was so egregious that the city overpaid $3.1 million in federal and state taxes in 2019 and failed to file a reimbursement claim within the statute of limitations. Mayor Steven Fulop took taxpayer money and effectively set it on fire.
What makes this entire situation worse is that the biggest loser in this whole budgetary crisis is not the current Mayor James Solomon or former Mayor Fulop; it is the taxpayers. To close the budget gap, Mayor Solomon has proposed a 15% property tax increase (down from 20%), even as the city is receiving $120 million in targeted loans and transitional aid from the state government. At a time when Jersey City’s cost of living is 26% higher than the national average, these tax increases will risk squeezing out existing residents, reducing the tax base, and making it harder to maintain sustainable, longer-term budgets.
The situation afflicting Jersey City is a lesson for all municipalities. Live within your budget and plan for the long-term. If this warning is not heeded, then do not be surprised when the budget time bomb blows up.
