Jersey City Mayor James Solomon attended the City Council caucus meeting yesterday to present finances to explain why he’s proposing a 20 percent rate hike for Quarter 3 tax bills.
By Daniel Ulloa/Hudson County View
Solomon, a former two-term Ward E councilman, began by saying it was a pleasure to be back in council chambers and said he would be back on Wednesday as well with budget season coming into full swing.
“As everyone knows, we face basically the biggest fiscal crisis certainly in Jersey City’s modern history, the largest one in the State of New Jersey since Atlantic City in 2015, one that unfortunately forces us to have … a set of difficult choices,” the mayor stated.
“ … Having faced with incredibly difficult choices, we wanted to look towards a couple of guiding values when considering the difficult choices before us.”
Solomon, who spoke for about 90 minutes total, continued that their goals are to avoid the worst case scenario where the state does not provide significant funding, which could lead to a tax hike as high as 31 percent, and/or massive cuts to city services.
“Neither of those are acceptable to our city, both would be extraordinarily devastating, so we’ve been working extraordinarily hard knowing that that was before us without the support that we need from the state.”
He further stated that they’re also prioritizing keeping Jersey City safe, highlighting that the over quarter billion dollar deficit is more than the entire public safety budget.
Solomon also reiterated what he said on Thursday when he announced the tax bill proposal, that his administration has brought the $255 million deficit down to about $200 million, that they’re seeking at least $120 million from the state, and a 20 percent tax hike would bring in approximately $80 million.
” … This is 13 times the size of the budget deficit that Mayor [Zohran] Mamdani announced in New York City based on the size of our budgets, right? Obviously, his budget is $125 billion and ultimately he had a $5 billion gap that he had to close. Our budget is around $800 million and we had a $255 million budget gap to close – that’s 28 percent, 29 percent of our operating budget: That is unprecedented,” he added.
“I know you all, I know every member of the public, is livid. They should be. This should never happen. The ability for this to happen requires failures on multiple levels. It’s something that as a council member, many of you know, when I voted against the budget, I called out the practices that were leading here. But, much of what was done was also hidden.”
Solomon alleged that there were $52 million in unpaid healthcare bills, with other expenses improperly paid out of capital accounts so that then-Mayor Steven Fulop who “wanted everything to look good in his run for governor.”
He also criticized Fulop for using one-time budget gimmicks like selling city property to the tune of $667 million between 2019 and 2025, letting union contracts lapse, and borrowing money for city operations.
Solomon added that the $200 million gap essentially comes down to two things: $109 million in unpaid bills, as an interim budget report said last week, and $91 million in underfunded city operations, or missing structural revenues.
“If we were to eliminate basically the entire civilian government of the city, that wouldn’t get us to the $80 million that we need. That’s the gap, not for anything new, simply for what we have,” he exclaimed, pledging that this will never happen again.
“ … Right now, we have to set our third quarter tax bill. We cannot delay the tax bill because residents need at least 30 days to pay for it. In 2022, we did not set our third quarter tax rate and a huge tax increase fell on residents for the fourth quarter. It was extraordinarily devastating.”
Acknowledging that the third quarter proposal was far from ideal, it remains a far superior option to placing the entire tax burden in residents’ fourth quarter tax bills, Solomon also said.
“We have to set it now so the difficulty is spread through those quarters,” he noted.
“Because $120 million is dependent on the state, we can’t introduce the budget until the state aid process is complete. That will be completed on June 30th.”
Solomon also reiterated that the city budget will be on the July 15th council agenda, which will be released to the public the week prior, with hopes of a final budget vote in August.
Ward F Councilman Frank “Educational” Gilmore sought clarity on if $200 million were placed on city credit cards, to which Solomon said the total budget gap is currently $200 million and about $110 million are the credit card bills.
He said retirement payments were a big item paid for via credit, later stating that the city’s surplus is nearly gone.
Further, Finance Director William Viqueira criticized the Fulop administration for using bonds to pay for healthcare costs.
“Not only a poor practice, technically, we are not allowed to bond to pay for operating expenses, right, that is not the way you operate a city, but because it was underbudgeted at the end of the year, it’s declared an emergency, emergency notes are issued to pay for those,” he declared.
Councilman at-Large Rolando Lavarro expressed surprised that no one called this out as a bad budgeting practice.
Solomon replied that the prior administration acknowledged the New Jersey Division of Local Government Services (LGS) opposed the bond measures for operating expenses.
“Has the administration pondered on ways to generate revenue?” Gilmore questioned.
Solomon said an increase enforcing parking and housing rules would help before explaining in more detail.
“The courts have a massive backlog of housing inspection cases. We are working through all of that to ensure that revenue from housing inspection comes to us,” he said.
“We are auditing every single PILOT (payment in lieu of taxes) in the city to ensure it brings back the revenue that developers should owe.”
Additionally, Councilwoman at-Large Mamta Singh wanted to see if Solomon could ask Hudson County not to raise taxes by 14 percent for city residents.
“I’ve been grateful for their partnership, we’ve made clear how painful this increase is. We’ve asked the county commissioners to look into this year’s budget, how they can lower it and we’ve made clear that, going forward, it’s unconscionable for this to continue to happen,” Solomon said, also noting that Hudson County Executive Craig Guy has been helpful in advocating for state aid.
He later said the county formula to calculate taxes can only be changed by the state legislature and he’d be willing to be part of the push to have that changed.
“Is there no way to avoid pain for taxpayers?” Ward D Councilman Jake Ephros asked.
Along with Ward B Councilman Joel Brooks and Ward E Councilwoman Eleana Little, Ephros said prior to the meeting he would support the tax bill proposal due to “extenuating circumstances,” as HCV first reported.
“There unfortunately are not many levers. It’s either raise revenue or cut expenses… We’ve spent a lot of time doing both,” Viqueira replied.
Council President Denise Ridley asked if the revenues from both the open space and arts trust funds could be used towards the budget, to which Solomon said the arts fund revenues could be diverted and that would ultimately be a council decision.
Solomon added they want the legislature to sign off on allowing the city to use revenues from the Open Space Fund Trust Fund in their budget.
