Jersey City taxpayers are confronting an unprecedented fiscal crisis that follows years of steep, abrupt reductions in state school aid. Hundreds of millions were already stripped from a city that is still home to deep poverty, forcing local taxpayers to shoulder a burden no working class community could reasonably sustain. Forcing the city’s predominantly working class taxpayers to absorb further shocks will trigger a fiscal unraveling whose effects will reverberate across the entire state’s economy.
As the elected leaders of Hudson County, we represent different communities, different levels of government, and different constituencies. But we are united today by a shared conviction: Jersey City’s fiscal crisis is not just a Jersey City problem, and it demands a state-level response.
Jersey City is the state’s largest tax base and its greatest economic engine. Stabilizing the city’s finances would not only benefit the nearly 300,000 residents who call Jersey City home but the broader state economy. As budget season kicks off for the new fiscal year, we believe the state should provide significant aid to Jersey City, and we stand ready to work with the Governor and Legislature to make that happen.
Jersey City Is Tackling This Crisis Head-On
Years of fiscal mismanagement by the previous administration left Jersey City with a budget deficit of approximately $250 million – roughly 28% of the city’s annual operating budget. All three major credit rating agencies have downgraded the city five times in the past three years. City reserves that once exceeded $100 million have been depleted to nearly nothing. Over $200 million in emergency debt was issued to cover basic operating expenses.
Since taking office in January, Mayor James Solomon has proactively led with an honest assessment of the situation. His administration published an exhaustive, transparent report on the full scope of the crisis and gave the public an honest accounting. He brought in a new Finance Director and a team of independent municipal budget experts, working at no cost to the city, and he has already taken decisive action. By switching the city’s third-party health insurance administrator from Horizon to Aetna, the Solomon administration cut city spending by roughly $30 million this year alone. The administration ended the hemorrhaging of money into the Pompidou museum project saving an additional $40M that was about to be spent. These are the first actions of many, from a city government that is serious about fixing the problem.
Jersey City Powers the State’s Economy—the State Cannot Afford to Let It Falter
Here is a fact that should be at the center of every budget conversation in Trenton: Jersey City residents and businesses generate an estimated $1.5 billion in income and sales tax revenue for the State of New Jersey every single year—representing roughly 3.5% of all state income tax collections and nearly 3% of sales tax revenue.
As an economic engine, Jersey City’s tax base is the largest of any municipality in the state. The city is home to more than 110,000 private sector jobs and drives economic activity across the region. Hudson County’s GDP has grown 32% since 2010, outpacing the state as a whole. Our housing production played a significant role in addressing the shortage that is driving up costs, while a hamstrung Jersey City will only slow our state’s ability to expand housing supply.
Put simply: we share a common interest in Jersey City’s fiscal success. If Jersey City falters, the state’s own deficit and structural challenges get significantly worse. A fiscal crisis that destabilizes Jersey City’s economy – driving away businesses and property taxpayers, undermining development, triggering further credit downgrades – would reduce the state’s tax base at the worst possible time, as the state grapples with a structural deficit that could drain state reserves by 2028. A stable Jersey City advances fiscal stability of the state’s finances as well.
We must also be honest about the role state policy has played. Under the S2 school funding formula, Jersey City’s state education aid was slashed from roughly $400 million per year to $130 million. This was a devastating cut that has driven dramatic increases in local school taxes. Jersey City receives just 9.8% of its budget revenue from state aid. Compare that to Camden at 53.6% or Trenton at 30.6%.
The current state formula is built on a myth – that we puncture today – that Jersey City is a wealthy city. It is true that Jersey City’s growth has brought high-earning professionals to small, geographically contained parts of the city. But the full picture tells a very different story. Nearly one in five Jersey City residents — 17.1% — lives below the poverty line, almost double the statewide rate of 9.7%, and an overwhelming 63% of students in Jersey City’s public schools are classified as economically disadvantaged. Nearly two out of three public school students are economically disadvantaged. Jersey City’s poverty rate is much closer to Newark’s and Paterson’s than it is to the state average, yet those cities receive tens of millions of dollars in aid. Suburban policymakers cannot look at Jersey City’s waterfront skyline and allow it to obscure the hard truth behind it.
Working Families Cannot Bear This Burden Alone
Jersey City residents have already absorbed enormous financial pain. Over the past decade, rents have soared 50%. In the past five years, Property taxes have increased 79% as school levies rose sharply to compensate for the loss of state funding. Working families – the teachers, nurses, firefighters, and small business owners who are the backbone of this city – are being squeezed from every direction.
Without state support, the math is brutal. Closing a $250 million gap primarily through local tax increases would push working people out of the city they call home, and force a steep reduction in basic services. And if those residents and businesses leave, the state loses the tax revenue they generate. This is not a hypothetical—we face the end of economic growth in Jersey City if we fail to act.
Fiscal aid is not a novel concept. The state already provides it to municipalities across New Jersey that face fiscal distress. Jersey City is not seeking long-term assistance, and leadership is focused on a plan that quickly gets the city back to self-sufficiency. But the scale of the inherited crisis demands urgent relief. The city’s new leadership has demonstrated the seriousness and fiscal discipline to use that aid responsibly.
A Call for Partnership
We are not asking the state to solve Jersey City’s problems for it. Mayor Solomon and his team have made clear that they will make the hard choices, like cutting waste, demanding efficiency, and being honest with residents about what it takes to get back to stability. What we are asking is for the state to be a partner in that recovery.
Aid for Jersey City is not a bailout. It is an investment in the fiscal stability of the state’s largest tax base, in the economic engine that supports jobs and revenue across the region, and in the working families who cannot shoulder this crisis alone.
Governor Sherrill and legislative leaders have spoken powerfully about the need for fiscal honesty and tough choices. Jersey City is doing exactly that. We’re ready to work together to make sure the state budget reflects that shared commitment to the people of Jersey City and to New Jersey’s economic future.
