Erin Lanahan 
Jersey City Mayor James Solomon announced the city is facing a $250 million budget deficit for 2026. After working with outside financial experts, Mayor Solomon released a report detailing the massive deficit on February 4th, 2026, saying that his team inherited the problem from the previous administration. Former Mayor Steven Fulop disagrees with these claims. Just a day after the report was released, Mayor Solomon says he’s going to take a $1 salary for the entirety of 2026. Here’s what we know about the Jersey City budget deficit, what Mayor James Solomon plans to do, and the response from former Mayor Steve Fulop.
The Budget Breakdown
The Solomon Administration says the report found years of fiscal mismanagement led to the huge deficit. They found the deficit is equal to 28% of Jersey City’s operating expenses, which is nearly six times larger than New York City’s budget deficit. All three major credit rating agencies, Moody’s S&P, and Fitch, downgraded Jersey City’s credit rating in recent years. Moody’s reportedly characterized Jersey City as a “financially struggling city with deteriorating liquidity profile” at the end of 2025.
Health insurance was underbudgeted by $34 million in 2025 and $18 million in 2024, according to Mayor Solomon. Mayor Solomon alleges $20 million was spent on consultants for a museum that was never built. He’s referring to the Pompidou museum project that was announced in 2021 but stalled in 2024. While no updates have been reported since 2024, the project has not been officially withdrawn.
Mayor Solomon also says the former administration failed to get back over $3 million in overpaid taxes. Six union contracts also expired with no money set aside for back pay, according to the mayor.
Here’s a closer look at Mayor Solomon’s key findings from the budget report:
- Approximately $100 million of Jersey City’s federal American Rescue Plan funding was used primarily to provide a one-time, election-year property tax cut in 2021, as opposed to long-term investments.
- Jersey City’s rainy day fund has been completely spent. It’s down from over $100 million a few years ago to almost nothing as of February 2026.
- Jersey City used a combined $667 million in unsustainable, one-shot revenue since 2019.
- Jersey City underbudgeted for known expenses, including over $52 million in unpaid health insurance bills from 2024 and 2025.
- Nearly $20 million was spent on consultants for the Pompidou museum project, including $7.5 million to a single architecture firm.
- Almost 1,000 Jersey City properties were sold during the Fulop administration for at least $100 million, with $33 million used in 2025 alone to plug budget holes.
- Poor budgeting and cash management caused Jersey City to be consistently late in paying large invoices, which incurred significant penalties as a result. For example, the City has paid over $1 million a year for not paying prescription benefit invoices on time.
- Jersey 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 full budget report is available online.
More From The Solomon Administration
The Mayor’s office says they have already taken steps to address this deficit. In addition to hiring a finance director, the Solomon Administration says it is bringing in independent municipal budget experts from the City University of New York’s Institute for State and Local Governance at no cost to Jersey City. It also switched health insurance administrators, which is projected to reduce expenditures by $30 million in 2026.
“For years, Jersey City residents were told our city was thriving financially. That was a lie,” said Mayor Solomon in a statement. “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.”
Mayor Solomon plans to work with state partners and hold community meetings across Jersey City in the coming weeks to develop a long-term plan. His goals are to prioritize people over politics, always tell the truth, minimize extraneous expenses, reduce costs for working families, and get Jersey City back to stability without cutting corners. No word yet on if these plans will include programming or staffing cuts.
Just a day after releasing this report, Mayor Solomon announced he would be taking a $1 salary for 2026 in the midst of the financial crisis. The Solomon Administration took another dig at the previous mayor in a statement, saying he “doubled his own salary to $245,000 during his tenure, even as the city’s finances deteriorated.”
The Response From Former Mayor Steven Fulop
Steven Fulop was Mayor of Jersey City for 13 years, serving from 2013 to 2026. He declined to seek a fourth term and ran in the Democratic primary for governor in 2025, but lost.
When asked about Solomon’s comments, Fulop told NJ.com, “We obviously disagree.”
Both Fulop and Solmon are Democrats. Before becoming Mayor, James Solomon served on the Jersey City Council from 2017 to 2025. According to Fulop, Solomon had “full budget responsibilities” during that time they both were in public office.
During a press conference, Mayor Solomon claimed he voted against every city budget while on the council. Fulop disputes those claims, calling them political. “During that time, he never raised any of these concerns and actually voted for virtually every contract and resolution that came before the council. This is unfortunately, just James playing politics, as it is standard practice for new mayors to blame their predecessors,” Fulop told NJ.com.
Plans for the Jersey City 2026 budget are still being finalized.
Follow @thehobokengirl on Instagram + TikTok for the latest Hoboken and Jersey City updates, sign up for our weekly newsletter here that shares everything you missed each week, and check out our events calendar, which has over 100+ events weekly to peruse.
