Executive Summary: Jersey City Was Sold Out

The Truth About Our City’s Finances

In Mayor James Solomon’s inauguration speech on January 15, 2026, he promised to always be honest and transparent with the people of Jersey City. That begins with shining a bright light on the fiscal health of our city, because the people should have a say in their city’s future with full knowledge of how their money is being spent - regardless of whether the news is positive or negative.

Since taking office, Mayor Solomon's team has worked with outside experts to assess Jersey City's fiscal condition. That work revealed the full scope of the problem: Jersey City faces a full-blown financial crisis, with a 2026 budget deficit of approximately $250 million—roughly 28% of the City’s projected annual operating budget.

This crisis was not inevitable. It was not caused by forces beyond anyone's control or an act of God. In fact, it was built during a time of prosperity for Jersey City–increasing tax revenue, a booming economy, and an extremely favorable national economic climate. This crisis is the direct result of choices made by former Mayor Steven Fulop, who—time after time—prioritized his short-term political ambitions over the people of Jersey City.

Former Mayor Fulop sold out his city in pursuit of a bid to be New Jersey’s governor, building an unsustainable financial house of cards. And as he abandons Jersey City for New York, that house of cards is now collapsing.

The Deficit is Real, Staggering, and Intentional

At roughly 28% of the City’s operating budget, the fiscal crisis left behind by former Mayor Fulop is six times worse than New York City’s projected 2026 deficit. Jersey City’s projected shortfall is greater than the entire annual cost of the City’s Police Department and Fire Department combined.

Jersey City's economic fundamentals remain incredibly strong, yet all three credit rating agencies have downgraded its credit rating recently. As Moody's noted in December 2025, the city's economy outperforms the region, the tax base is growing rapidly, and residents are higher-earning and better-educated than those in comparable cities.

Despite these advantages, Moody's characterized Jersey City as a "financially struggling city with deteriorating liquidity profile" and downgraded our credit rating—the second round of downgrades in just three years.

How does a city with every economic advantage end up in a financial crisis? The answer: political decisions that prioritized short-term wins over long-term stability - fueled by gross financial negligence.

Through Gross Negligence & Personal Ambition the Former Mayor Sold Us Out

This deficit is the result of years of intentional choices made to shield the former mayor from making difficult decisions. Instead of governing responsibly, he attempted to increase his standing with the public for his gubernatorial bid by investing City resources in vanity projects and hiding mismanagement.

Egregiously, the former mayor spent nearly 70% - $100 million - of the City’s federal COVID relief funding primarily to provide a one-time, election year property tax cut in 2021. This was crucial funding meant to stabilize city finances, that he instead used as a talking point during his re-election campaign. While he benefited, the city became precipitously more financially unstable from that point forward.

As the cracks in the city’s financial foundation began to grow, former Mayor Fulop relied on a series of gimmicks to keep the public in the dark.

The City began to constantly shift costs between fiscal years in ways that incurred debt and late fees, with no plan to pay off the mounting deficit. Most severely, the City began hiding the true cost of employee health benefits. They routinely and intentionally asked for less money than what was needed, and then chose to borrow and shift costs to other years to artificially close the gap - leaving the next Administration over $52 million in unpaid medical bills and incurring over $1 million per year in late fees for not paying prescription bills on time. 

The actions taken by the former mayor were not only budget tricks, but a systemic failure to maintain, and perform, basic government budget controls. Former Mayor Fulop let six union contracts expire without maintaining reserves to pay for back-pay. He constantly borrowed to cover basic operating expenses - violating a fundamental tenet of municipal budgeting. The Solomon Administration is still finding examples of practices and errors that cost Jersey City taxpayers millions of dollars.   

His mismanagement was so severe, the city once overpaid state and federal taxes by $3.1 million. The IRS let the City know shortly thereafter, but the City failed to request a refund before the deadline - costing the City the full amount.

This is not money we can get back. It is gone.

The hard-working people of Jersey City labor every day to balance their personal budgets, and they understand the consequences of overspending. Unlike our residents, former Mayor Fulop chose easy ways out of the budget mess of his own creation.

To keep this growing house of cards stable and boost his political career, former Mayor Fulop began to literally sell his city off, with his City Council majority signing off in lockstep. He emptied the City’s entire rainy-day fund, from a high surplus of over $100 million just a few years ago, to almost none now. He sold off almost 1,000 city properties for at least $100 million, entered into agreements that shifted property taxes to utility rate increases. All the while, he ran up the City’s credit card, issuing more than $200 million in emergency debt, with most of that coming just since 2021. All in all, Mayor Fulop used a combined $677 million in one-shot revenue from 2019 until the end of his Administration.

Amidst this dire situation, the former mayor continued to engage in wasteful spending he knew the City could not afford. Notably he continued to pursue bringing a French art museum to Jersey City - including spending $7.5 million on a single consultant and nearly $20M on project consultants collectively. Worst of all, under examination, there was no credible plan for successfully seeing the museum to completion.

The House of Cards Collapses

The one-time tricks have run out. City reserves have been depleted—and are actually negative when excluding funds from emergency borrowing. There is no more property left to sell, no more federal relief coming, no more rainy-day fund to raid.

Even with all that, the people of Jersey City have still seen their costs skyrocket. Over the last 10 years, both property taxes and rents have soared by over 50 percent. During former Mayor Fulop’s time in office, city services began to diminish as retiring employees were not replaced, vital positions were eliminated, and leadership was distracted by maintaining the Mayor’s house of cards. In the end, the people pay more, can afford less, and are unable to rely on a strong city government.

The bill has now come due with the City’s $250 million shortfall. Here’s a summary of the main pieces of the 2026 deficit:

1. Unpaid healthcare bills from 2024 and 2025: $52 million
2. Unbudgeted increases in healthcare costs for 2026: $48 million
3. One-time land sales used last year to plug the budget holes: $33 million
4. Emptying out the City’s rainy day fund in 2025 with no plan for 2026: $27 million
5. Unbudgeted retirement costs and tax appeals: $19 million
6. Accounting gimmicks to create fictional revenue: $15 million
7. Older, improper capital expenditures with no plan for debt repayment: $13 million
8. Reserve for resolving expired union contracts that should have been budgeted every year: $12 million
9. Declining PILOT revenue with no plan for replacement: $12 million
10. Annual operating expenses improperly paid for out of capital accounts: $8 million
11. Overpayment of state & federal taxes that the City failed to get back: $3 million

Mayor Solomon’s Commitment to the People of Jersey City

Mayor James Solomon is committed to a different approach—one built on truth, transparency, and expertise. This report represents the first step: telling Jersey City residents the full truth about our financial situation, even when that truth is painful.

Mayor Solomon’s record as Councilman was clear. He voted against all of the former mayor’s budgets, proposed alternative plans, and warned that what was being presented did not align with the facts. After being elected, he immediately built a team to get the city’s fiscal house in order.

First, the Solomon Administration hired an experienced Finance Director. Then, it brought in a team of independent outside budget experts working at no cost to the city to develop a responsible path forward. In the coming weeks and months, the Administration will engage the entire Jersey City community on the difficult choices ahead.

As we work to address this crisis, the Solomon Administration will be guided by clear principles:

People Over Politics. Every choice will prioritize the residents of Jersey City—not political optics nor personal ambition.

We will stabilize property taxes. We understand the affordability crisis facing our residents and will fight to minimize tax impacts and make them predictable, while pursuing every available alternative.

We will not balance the budget on the backs of the city's working families. We will fight to protect those who can least afford additional burdens and cuts to city services as we make difficult decisions.

We will tell the truth—always. No more spin. No more tricks. No more gimmicks. Just honest communication about where we stand and what it will take to recover in the years to come.

We will lead by example. You won't see trips to Paris from this administration. As the city tightens its belt, city leaders will do the same.

The people of Jersey City deserve a government as good as its people. For twelve years, the City’s government served as a vehicle for one man’s political aspirations.

We deserved better, and this Administration is committed to charting a different path forward.

 

Introduction: Jersey City’s Financial House of Cards

From the outside looking in, the story of Jersey City over the last decade has appeared to be one of glimmering revitalization, with former Mayor Fulop labeling the City’s growth as “one of the greatest renaissance stories in the entire country.”^[1]

Indeed, one would expect Jersey City to be in terrific fiscal shape. Over the last 15 years, coming out of the financial crisis, the national economy has grown consistently, with low unemployment and interest rates prevailing throughout much of that entire period. This national pattern has been fully on display in our region–Jersey City has had a growing economy for over a decade, with surging development and a rapidly increasing population.

Cities throughout the country certainly faced significant challenges with the 2020 COVID-19 pandemic. However, in those several years, Jersey City also had the benefit of the largest infusion of federal aid and investment for local governments in American history.

Given those extraordinary tailwinds, the expectation would be that Jersey City would not only have a stable budget, but be well-positioned to invest in city services, programs, and infrastructure. But recently, warning signs emerged that this was not the case. All three ratings agencies—Moody’s, S&P, and Fitch—downgraded Jersey City’s credit rating in 2023. Then, this past year, Jersey City was downgraded again twice. In June 2025, S&P Global issued a downgrade, and then Moody’s followed this past December by also downgrading the City and declaring that it had a negative outlook on our finances, in part because “the steps that would be necessary to restore a sound fiscal profile are becoming increasingly drastic.”^[2]

Since his election in the runoff on December 2, Mayor Solomon’s team has been working with the City’s Department of Finance and outside experts to determine the full extent of the City’s financial challenges as quickly as possible. Unfortunately, the verdict is clear: Jersey City faces a full-blown financial crisis, with an initial budget deficit exceeding $250 million, or roughly 28% of the annual operating budget.

Mayor Fulop made decisions that—over time—led to City spending far outstripping the cash coming in, and used every budgetary trick and gimmick in the book to cover it up for as long as possible. The tragic reality is that at every turn, Mayor Fulop prioritized short-term political gain and high-profile “wins” over the long-term fiscal health of Jersey City. He has now left Jersey City for our neighbor across the river, leaving us with a financial house of cards that is on the verge of collapsing, and a government that has been stripped of the expertise and basic operational structures needed to confront a problem of this scale.

Throughout his time on the City Council, Mayor Solomon was one of the few dissenters trying to shine light on the practices that did trickle out into public view, and stand against Administration proposals that seemed to be mortgaging the City’s future. He voted against every budget that Mayor Fulop proposed, offering alternative budget proposals that went unheard. He also voted against one-time tricks like land sales, and fought to try to bring greater transparency to the budget process. Now as Mayor, he is committed to returning the city to a stable financial footing.

This report proceeds in three parts. First, it presents the current snapshot of the City’s budget deficit in detail and with full transparency, to the best of our understanding based on the information and analysis we have to date. Second, it reviews in depth both the intentional policy decisions and complete breakdown of basic budgetary control that brought Jersey City to this point—some of which has previously been publicly reported in fragments, but some of which has not. Finally, it describes Mayor Solomon’s process to tackle the massive budget gap, and the guiding values that will be at the core of his approach to leading the City out of this crisis. 

The people of Jersey City have already been hit hard by the affordability challenges that led them to vote for a change in this past election. Heartbreakingly, this financial emergency will force many further tough choices that will add to the pain for all of the communities in our City. As we continue to dive deeper into this issue and formulate the long-term plan to get out of it, we will work to deliver the government that Jersey City deserves but has not gotten—one based on truth & transparency, expertise, and a commitment to the best interests of our residents. 

The 2026 Budget Outlook

Based on the City’s latest 2026 financial projections, as vetted by outside experts, Jersey City’s spending in 2026 will far outstrip the revenue it takes in, leading to an over $250 million budget deficit. 

This section provides an overview of the 2026 budget outlook, and a more detailed spreadsheet detailing the projected deficit is attached to this report as Appendix A.

The 2026 Budget Deficit

Under current projections as of today, total expenses will be over $922 million, while total revenues will be roughly $667 million, for a total estimated budget gap of $255 million. This budget gap is equal to 28% of the City’s overall operating budget.

The graphs below show the snapshot of how City spending is projected to far outpace City revenues in 2026 based on current levels of city services and programs.

The City’s massive deficit this year is “structural,” meaning that it is caused by a fundamental, growing mismatch between the amount of money coming in through taxes and other revenues, and the amount of money that has to go out every year for city services and programs. Under state law, this gap has to be filled every year so that the City has a “balanced” budget. Since our deficit is structural, with expenses consistently exceeding revenues, the size of the “hole” the City has to fill will only increase year after year unless significant changes are made. As the next section of this report describes in more detail, that means that in every recent year, the City has started in a massive budget hole, which has then been filled with a series of one-time fixes and gimmicks.

2.    This is a crisis: Jersey City’s budget deficit is unprecedented, and vastly greater than other municipalities across the state and the region.

Jersey City’s projected 2026 budget gap is much higher than the gaps that have been announced by other cities in the region. Comparing the size of our gap to our annual budget, Jersey City’s deficit is six times as severe as that of New York City, which announced that it has a budget “crisis” just last week. The gap exceeds the entire budget of Jersey City’s police department and fire department combined.   

The Road to Jersey City’s Financial Crisis

Jersey City’s financial crisis was not inevitable or accidental. A complete, exhaustive account of the misdeeds, corruption, and incompetence that led to this point is beyond the scope of this report, and will take months or even years of further analysis to become fully clear. Nevertheless, this section describes some of the most egregious examples of Mayor Fulop’s policy decisions, gimmicks, and operational indifference and neglect that drove Jersey City to this crossroads.

The tragic reality is that Mayor Fulop’s claims that he kept the city’s fiscal house in order was a mirage–a house of cards built on tricks and gimmicks–that now threatens to collapse.

1. Mayor Fulop governed during a “sunny day” time for the economy

At first glance, Jersey City would seem to have everything going for it–growing rapidly, with a huge amount of new development contributing to increased property tax revenues. And as we noted earlier, Mayor Fulop’s time in office coincided with some of the most favorable national and regional economic conditions imaginable.

Given all this, the City should be in the best fiscal shape it has ever been in. Instead, it faces an extraordinary financial crisis. How did this happen?

2.    2. A fateful policy choice: Squandering Jersey City’s historic opportunity by using COVID relief funds for a one-time $66 million tax cut

Mayor Fulop took that generational opportunity to secure the future of Jersey City, and squandered it on the altar of his own political gain. In 2021, Mayor Fulop was running for re-election for a third term. It was already widely believed that he was planning to run again for Governor of New Jersey, and would in fact announce his run just two years later. In that context, the Mayor had a strong short-term political incentive to run up the score in his re-election campaign.

In an astonishing act of fiscal irresponsibility, Mayor Fulop implemented a one-time, $66 million municipal tax cut, amounting to an average reduction of almost $1,000 per household.^[3] This came at a time when other cities across the state and the country were raising taxes due to high inflation—how did he do it? By using one-time American Rescue Plan (ARP) funding that was available for long-term investments in the city’s future. This decision helped drive a structural deficit—mismatch between spending and revenues—that was a fatal cause of Jersey City’s crisis today. In fact, Mayor Fulop used 70% of Jersey City’s allotment of ARP funds—almost $100 million—to plug budget gaps in 2021 and 2022.

He could have used this huge opportunity responsibly, like many other cities did–using these funds to responsibly replace revenue from temporarily decreased tax collections, while also making long-term investments. For instance: 

• Pittsburgh used $20 million of its funding to dramatically accelerate replacement of all lead service lines in the city.
• Detroit used its funding for neighborhood revitalization including the construction of affordable housing, violence prevention and other public safety investments, home repair grants, and major new parks.
• Cleveland made similar investments, and also invested $10 million into an endowment fund for community organizations working on violence prevention.
• Austin used funding for its intensive housing-first approach to homelessness, including for the construction of tiny homes, rapid rehousing, and permanent supportive housing.

Instead of leading like these other cities, Mayor Fulop used the money to enact a politically motivated tax cut in his re-election year, a massive lost opportunity to invest in the future that also set the City up for financial failure.

3. After creating a massive structural budget gap, Mayor Fulop resorted to a huge array of irresponsible tactics to push Jersey City’s bills onto the credit card.

Expenses in previous years have been artificially pushed forward, contributing to the massive budget deficit in 2026. Pushing the bills onto the credit card by underbudgeting and overspending has been a consistent, wide-ranging practice since 2021, as has been documented in Jersey City’s audit reports and other sources.

Occasionally missing the mark in budgeting is understandable. But the dramatic differences between actual spending and the budget, year after year, show a consistent pattern and practice of systematically understating the City’s annual expenses, and using debt to push these expenses out beyond Mayor Fulop’s anticipated time in office. That bill is now coming due in full force.

The COVID-19 pandemic shows this practice. In 2021, even as Mayor Fulop used federal funding for a one-time tax cut, the City ultimately ran a massive $93 million operating deficit, meaning that it spent $93 million more than came in that year. Initially, the City had identified a $35 million deficit, which went up dramatically after an audit. The City had to get special permission from the State to issue debt to cover this, which we are still paying this off to the tune of $11 million annually.

Underfunding the budget that year was not an anomaly. Under Mayor Fulop, the City has consistently overspent the amount of money that is initially budgeted for the year, requiring these expenses to be paid in next year’s budget, or spread out over the following years by issuing “emergency notes” or other kinds of debt. In total, the City has issued over $200 million in emergency notes since 2013 for regular operating expenses, with the vast majority of that debt incurred in just the last few years. This has poisoned the City’s finances by increasing the overall amount the City will have to pay due to interest, and pushing off item after item to burden taxpayers in the future.

The most dramatic, and egregious underbudgeting has consistently been in health benefits: For years, the City knowingly and systematically budgeted significantly less money than what was needed for employee and retiree health benefits. This gimmick made the budget appear lower than it actually was, while incurring significantly higher costs due to late payments and future interest payments.

• In 2024, the City overspent its health insurance budget by $11.7 million. By law, this overspending should have been raised through increased taxation in the City’s 2025 budget, but it was not, so it must now be raised in the Solomon Administration’s first budget in 2026.
•   In 2025, the City underbudgeted for health insurance by over $40 million. The City Council passed a resolution in November 2025 to raise $22.5 million of that as an “emergency appropriation” in the 2026 budget. The new Administration will have to determine how to pay for the remaining $18 million in 2026 as well.
• When the transition team met with the Administration in December 2025, they were initially given a projection for 2026 health insurance expenses of roughly $155 million. After the transition team brought in insurance experts to look at those numbers, they turned out to be hugely understated, and the actual projected expense should have been over $195 million dollars.

There are numerous other examples of consistent underbudgeting.

• Severance payments: In every year since 2021, the City has under-budgeted for required severance payments for city employees who have left their jobs by tens of millions of dollars—which should have been fully expected—and issued debt to cover the cost. Jersey City issued $20 million dollars in special emergency notes for these costs in 2025 alone. In 2026, the obligation to cover these debt payments will exceed $10 million, and as it currently stands we will be paying off these over-expenditures at least until 2030.
• Tax appeals: The City faces an extremely high number of tax appeals where property owners dispute the value placed on their properties, and sometimes get a refund if they win the appeal. Current projections show that the City is now on the hook for over $10 million in refunds annually, but the City has only budgeted a few million dollars or even zero dollars for this every year, and has borrowed to pay off the rest.
• Capital allocation ordinance. In 2013, the City’s auditor made clear that the City would need to find a way to repay $13 million in capital funds that were improperly spent, but Mayor Fulop took no action for his full 12 years in office, leaving the next Administration on the hook. Beginning in the 1990s, the City spent over $13 million on roughly 20 capital improvement projects when it didn’t have the money allocated in the proper capital accounts. The improvements had been approved by the City Council with the requirement that they would be funded from bonds, but the bonds were never issued. The City’s auditor made clear year after year that these were expenses that would need to be funded. Since Mayor Fulop put off action, the City lost the ability to issue tax-exempt bonds to fund the improvements, and the City will now likely have to raise the money in 2026.

4.4.  To pay the bills, he also resorted to temporary revenue sources that bargained away the future of the city.

Given the scale of the deficit problem, even all of that borrowing on the credit card has not been enough to fill the gap. Instead, Mayor Fulop turned to a wide variety of temporary revenue measures that have undermined the City’s ability to move forward and recover, on top of the federal ARP funds that were used to plug budget holes in 2021 and 2022. All in all, he used a combined $677 million in one-shot revenue sources since 2019.

• Selling valuable City land: During Mayor Fulop’s tenure, he sold almost 1,000 City properties to private parties for at least $100 million, whether through the City or through affiliated agencies like the Jersey City Redevelopment Agency. By comparison, Newark only had about 300 sales or transfers over the same period. In many cases, the City got no public benefit from these sales–instead the land often went to developers who built luxury housing on it. And instead of using this money to invest in Jersey City’s future, it was used to plug budget gaps, including over $33 million in 2025 alone. These one-time shots have run out, and the City will now need to fill that hole in 2026 through other means.
• Running down the rainy-day fund during sunny times: The City’s “fund balance,” a source of cash that can be used to fill gaps in times of emergency, has been completely spent down from a high of over $100 million in 2022, to almost nothing today. In the years since, the Administration has been taking any surplus that the City generates every year, and using it to plug the budget instead of putting it into the rainy-day fund. Now, we have no reserves left to support the City in harder times. 

• In 2025, the full $28 million in Jersey City’s surplus from 2024 was used to plug the budget hole that year.
• In 2024, the full $38 million in surplus from 2023 was used to plug the budget hole that year.

•  In 2023, the full $22 million in surplus from 2022 was used to plug the budget hole that year, plus an additional $46 million from reserves.

• Turning property taxes in the present into water taxes in the future: In 2023, the City entered into an outrageous deal with the Jersey City Municipal Utilities Authority “JCMUA,” which runs our water and sewer system and charges fees to residents accordingly. This deal was a 40-year renewal of the City’s “franchise fee” agreement with the JCMUA, where the JCMUA makes payments to the City for the right to provide its water and sewer services. It dramatically frontloaded these payments to help Mayor Fulop close his budget gap, with an extra $30 million payment from the MUA to the City in 2024, and two extra $10 million payments in 2025 and 2026. So instead of raising City property taxes today, Mayor Fulop forced the MUA to issue debt that will show up in increased utility bills for City residents. The State’s Local Finance Board advised against this deal, but they proceeded anyway.

5. 5. Mayor Fulop disengaged from the budget process, and basic financial controls and planning completely collapsed.

From Jersey City’s recent independent audits, it was already publicly known that there have been significant deficiencies in the city’s accounting and financial controls. Since the beginning of the transition, we have learned that the situation is far more serious than previously known, with numerous examples of tax dollars being outrageously misspent.

• The City overpaid its taxes by $3.1 million, and now it’s too late to get it back. In 2019, the City overpaid taxes by $2.6 million to the federal IRS, and by $500,000 to the State of New Jersey. The IRS immediately notified the City about the overpayment, but the City failed to respond and file a claim for reimbursement in the legally required time, and now the statute of limitations on recovering the money has passed. The money is lost.
• The City has not paid its bills on time, incurring massive late penalties. Because of poor budgeting and cash management–including the depletion of our cash reserves and the complete absence of any cash balance forecasting–the City is consistently late in paying large invoices, and sometimes incurs significant penalties as a result. For instance, for the last several years, the City has incurred over $1 million in late fees and penalties every year for failing to pay its prescription benefit invoices on time, including:
• $1.3 million in 2023
• $1.1 million in 2024
• At least $1 million in 2025, pending the final close-out of the City’s 2025 books

• The City lost federal money we were owed because we never answered emails. Certain departments, like the Public Safety Department, had little to no fiscal oversight, with no tracking of weekly or monthly expenditures against what was budgeted for the Department, causing regular overruns. For instance, we learned that Jersey City was owed hundreds of thousands of dollars in overtime compensation from agencies like the FBI who were loaned JCPD officers for their operations from 2022-2024. They repeatedly reached out to the Department of Public Safety to try to send us the money, but no one ever answered, and now it’s too late to collect.

• There is no true City capital investment plan or reliable inventory of city assets. By statute, the City is required to have a 6-year capital investment plan (this plan would be the basis for prioritizing all long-term investment in City infrastructure or other long-term priorities). At the beginning of the transition period, the transition team requested a copy of the capital plan, but learned that no such plan exists beyond the several sheets that are included as part of the City’s “user-friendly budget” every year. As a result, there is little strategic thinking about the prioritization of capital investments or controls on the use of capital funding.

• There is no reliable inventory of City assets. Additionally, the City’s auditors have consistently found that the City does not have a verifiable inventory of all of its physical assets, and the existing documents describing the assets are of such low quality that a new inventory needs to be created through physical inspection entirely from scratch.

• Capital funds are being used for operating costs. During the transition, the transition team learned that very significant ongoing operating expenses have been improperly paid through the capital fund in order to keep those expenses out of the City’s annual budget. It is not yet clear how widespread this practice is. The most notable example is the Via program, which costs $8 million annually, but has been paid through the capital budget.

6. A Vain and Wasteful Spending Spree
While Mayor Fulop was totally disengaged from basic financial management, he pushed forward vanity projects, with the prime example of the Pompidou Project.

Pompidou

All of Jersey City wants to see the arts and culture thrive here, but Mayor Fulop’s Pompidou Project metastasized into a grandiose money pit. The City has now spent almost $20 million in funds on consultants and other expenses since 2016–the vast majority of it from City taxpayer dollars–with virtually nothing to show for it. That spending includes:

• $7.5 million in fees to a single architecture firm for architectural design for the project.
•  $4.5 million in licensing fees to the Pompidou, for a museum that is years away from ever even opening.
• Over $5 million in additional fees to 24 additional consulting or professional services firms.

All the while, despite his spending spree, the Mayor had no problem shifting various costs to the City’s residents and non-profit organizations. For instance, he dramatically increased fees for Jersey City cultural organizations to hold parades and events. Here, the revenue to the City amounted to just a few hundred thousands of dollars, but the impact on cultural organizations that were subsequently unable to hold longstanding celebrations was immense.

The Collapse of the House of Cards: Comparing the 2025 and 2026 Budgets

This report has exhaustively outlined the disastrous practices that brought Jersey City to this point. This section describes how all of this has come together to cause Jersey City’s massive 2026 budget shortfall. The City is currently in the ongoing process of closing its financial records from 2025, to determine if there are other overruns, issues with revenue collection, or other issues that could further impact the 2026 budget deficit projection. As a result, the current estimate of the total size of the deficit will continue to be refined and modified over the coming weeks and months.

Key Elements of 2026 Deficit Projection

1. Unpaid healthcare bills from 2024 and 2025: $52 million
2. Unbudgeted increases in healthcare costs for 2026: $48 million
3. One-time land sales used last year to plug the budget holes: $33 million
4. Emptying out the City’s rainy day fund in 2025 with no plan for 2026: $27 million
5. Unbudgeted retirement costs and tax appeals: $19 million
6. Accounting gimmicks to create fictional revenue: $15 million
7. Older, improper capital expenditures with no plan for debt repayment: $13 million
8. Reserve for resolving expired union contracts that should have been budgeted every year: $12 million
9. Declining PILOT revenue with no plan for replacement: $12 million
10. Annual operating expenses improperly paid for out of capital accounts: $8 million
11. Overpayment of state & federal taxes that the City failed to get back: $3 million

The failure to budget enough in previous years has come due:

• The city never budgeted enough for severance payments for retiring cops and firefighters, we need to start budgeting those properly now.
•  The massive underbudgeting of health insurance ends now, with the 2026 projection far above the 2025 projection as a result
• Contracts have expired for at least six of our city unions (some for over five years), meaning that employees in those unions will be entitled to “retroactive” pay once those contracts are finalized. Standard practice is to allocate a “reserve” every year, so that the City doesn’t have to bear those payments all at once. Mayor Fulop failed to do that, and so we now have to reserve those funds in 2026.
• We now project we will need to include almost $8 million for tax appeal settlements, as nothing was budgeted in 2025.

The massive deferred charges are hitting us now in 2026 and in future years, including:

• Over $50 million in charges from health insurance underbudgeting in previous years.
• $22.5 million in charges for the 2025 health insurance underbudgeting that was already authorized for emergency appropriation.
• $16.5 million additional that will need to be raised to cover 2025 insurance underbudgeting.
• $11.7 million outstanding from the 2024 health insurance underbudgeting that was not raised in 2025.
•  The $3.1 million in tax overpayments to the IRS and New Jersey that we can’t get back anymore.\
• $11.5 million in charges from the 2021 deficit in operations.
• Almost $10 million in charges to pay off borrowing for underbudgeting of severance payments from 2021 - 2025

●      The $13 million in spending on capital improvements that was never funded, and was discovered at least as early as 2013, will now need to be raised since the previous Administration pushed off the problem and it’s too late to borrow.

●      Debt service is continuing to increase as the bills for the City’s previous borrowing come due.

No more improper shifting money around:

●      Expenses like the $8 million annual contract for the Via program will need to be moved out of the capital fund, and into the annual operating budget in 2026.

The one-time gimmicks have run out:

●      The City has already sold off parcel after parcel of valuable City land, properties that could have been used to benefit the community. $33 million of those sales were used to plug the hole in 2025.

●      Reserves are gone, with $28 million used to plug the hole in 2025, and any surplus the City may generate this year will be needed to build those back up to get the City back to stability.

Increases in the City’s property taxes revenues from the growth in development are real, leading to an estimated $13 million in increased revenue in 2026, but tiny in comparison to the overall structural deficit.

Jersey City’s Path Forward

The honest truth is that coming out from under a crisis of this magnitude will not be easy. Since December, Mayor Solomon’s team has been working to understand the scope of the problem. Many questions still remain unanswered, but now the Mayor can begin to turn to the difficult process of developing a path forward for Jersey City.

In the months and years ahead, the Solomon Administration will always act in accordance with several key values and 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.

As a next step, we have already brought in a new Finance Director and a team of independent municipal budget experts who are offering their services at no cost to the City, and we will bring on additional resources as needed.

The City’s new Finance Director, Bill Viqueira, is a seasoned financial professional who lives in Jersey City, with decades of leadership experience in both the public and private sectors. He previously served as the Chief Financial Officer of NJ Transit, a Senior Advisor for the Gateway Development Commission, and was an investment banker prior to moving into government service.

Director Viqueira will be supported by a team of municipal budgeting experts from the City University of New York’s Institute for State and Local Governance (ISLG). The ISLG team has helped dozens of cities across the country with financial turnarounds, and will be led by experts who have served as top budget and financial officials for some of the largest cities in the country.

In coordination with City staff, this team will work over the coming months to develop Jersey City’s first true five-year financial plan to resolve the structural budget deficit. This will include uncovering all of the remaining financial issues for the City–including areas that have not yet been deeply explored including the City’s capital fund, and financial operations at the City’s agencies and authorities. As part of tackling this problem, the Administration will:

• Hold extensive community meetings in every ward of the City to answer resident questions and keep them informed every step of the way.
•  Work with the State of New Jersey including Governor Sherrill, the Department of Community Affairs, the State Legislature, and other key stakeholders to develop a long-term plan.
• Brief and inform federal partners who can help secure additional funding for Jersey City.
• Develop a budget proposal for the 2026 budget that sets the City on the path to stability.

Already, the Mayor has taken decisive steps to reduce the City’s budget deficit without hurting programs or services for residents. Most notably, the Mayor announced last week that the City will be switching its third-party medical health insurance administrator from Horizon to Aetna. This is projected to save the City roughly $30 million in 2026, while providing benefits for city employees that are just as good or better than their current Horizon plans. Mayor Fulop was aware of Aetna’s lower priced proposal and had the ability to make this switch, effective January 1, 2026. However, he chose not to make that decision, and left the City with a month-to-month contract for Horizon, and as a result the City spent $5 million that it didn’t have to, and employees ended up paying more in premium contributions.

Conclusion

This report outlines the state of Jersey City’s financial crisis to the best of our knowledge today. Given the scale of the crisis, many residents may rightfully be asking: How could this conduct have continued for so long without being caught? The answer seems to be that the warning signs were there all along, but the problem grew over time, with only bits and pieces of the picture emerging in the media, and no one from the outside having a full view.

Jersey City is a growing, vibrant city. It could and should be a national model for how we can deliver public services effectively and while also improving affordability. Getting there will require responsibility, competence, and the courage to make tough decisions. Every resident of Jersey City deserves that from their government, and as we look from the past to the future, the Solomon Administration will work to deliver it.

 

APPENDIX A: DETAILED COMPONENTS OF ESTIMATED 2026 BUDGET SHORTFALL