This is part of a series on the 2021 city budget. The spirit of this series is: I’m interested in unpacking the budget and sharing as I go. In that same spirit, I’m sharing interactive Tableau data visualizations that help others dig into the budget. See the full series here. The 2021 budget documents are online here.
Several questions I’ve gotten around the city budget are: “how is the city funded?” and “what percentage of the budget is funded by property tax versus other revenue sources?” and “how is the city lowering its tax this year…is it cutting expense or using some other means of funding?” These are all questions that relate to revenues. We can answer these and other questions using public data.
Municipal Revenues – a Primer
Revenues can be thought of as “how the city gets its money.” Local municipal governments can obtain revenues from various sources:
- City property tax aka the “city levy.” This is the amount of property tax required to fund the city budget. Every taxpayer pays a small fraction of the total levy — that fraction is your city property tax expense.
- Local revenues. Unlike property tax where everyone has to pay no matter what, local revenues are “user driven” in the sense there is an underlying transaction involved between the city and the payor. The types of transactions vary, from hotel occupancy tax paid by a tourist to liquor license fees paid by a restaurant owner to fines for parking tickets.
- Abatement (“PILOT”) fees. Not all municipalities rely on PILOT revenues, but Jersey City does, and significantly so. Abatements are a structural portion of Jersey City’s budget (i.e. they are baked into the budget each year in significant amounts), comprising 18% of total revenues in 2021. My previous post in this series looked at the most recently available abatement data from the 2021 user friendly budget; you can check that out here. I also wrote a series on abatements here.
- Federal & state aid. Each year, the city gets state aid from NJ; the bulk of it relates to energy tax which you can read more about here. This year, the city is also getting one-time federal COVID-19 aid from President Biden’s American Rescue Plan.
- Other revenues. These are revenues that don’t fit into any other buckets, including an MUA franchise payment and the sale of city buildings.
Check out the “Key assumptions and factors” at the bottom of this post for more detail on these categories.
The Highlights, based on the 2021 proposed budget:
- The 2021 proposed budget has $621 million in total revenues.
- The largest slice of revenue is the $214 million city property tax. This is also called the “city levy.” This year’s total city tax levy represents a $68 million decrease from last year’s $282 million levy (which will logically translate into a city property tax decrease for taxpayers).
- Structural expense is actually up this year (check out my post on expense here). So the city is achieving the tax decrease not by cutting expense but rather by increased funding in these areas:
- + $50 million more federal COVID-19 aid in 2021 vs 2020 (2021 aid is officially known as the American Rescue Plan, or “ARP“). Some context: Jersey City was allocated $146 million in total ARP aid; $78 million of that amount is included in the 2021 budget, compared to $28 million of federal COVID-19 in 2020. ARP aid expires in 2024.
- + $8 million more through the sale municipal properties (the city sold $20 million of property in 2021, an increase over $12 million of property sold in 2020)
- + $8.7 million of “interfund due from capital.” Generally speaking, this is an internal transfer of income. It’s not clear from the budget what exactly this transfer relates to (and digging into that level of detail is beyond the scope of this post), but details about interfund activities are reported in the city’s annual audits, the most recent of which is from 2019 and available on the city website here if you’re interested in learning more.
- + $3.1 million more in hotel occupancy tax, which was $4.5 million in 2020 but is projected to be $7.6 million in 2021.
Explore the budget on your own
I created the visualization below as a way to step through basic spending picture, including the highlights noted above. At the bottom of the visualization you can sort and filter the raw data. A reminder: this data originates in the 2021 proposed budget. Please see “Key assumptions and factors” below the visualization for source data and related context.
Key assumptions and factors
1–This data originated in an Excel document that I requested from the city budget office. The PDF version of this document is on the city website here.
2–The official revenue categories are defined by the state in a budget template file you can view here. I truncated the state-defined names to make them more legible for the average reader. I also broke some categories out into more detail, as needed. See below for the official state revenue descriptions versus the more reader-friendly terms in my visualization.
And, note there are three “3g” items — that is one overall category in the budget (3. Miscellaneous Revenues – Section G…”) that includes PILOT revenues, federal COVID-19 aid, and “other” revenues. I broke out each of these sub-groups as I felt it was helpful to highlight each.
3–If you’d like to learn more about these budget categories, the state publishes a document here that lists the accounts used.
4–The filters used in the visualization are drawn from three spots in the original dataset: the main revenue category, an applicable sub-category, and the “Sheet” indexing reference used at the bottom of each page of the budget document. See below for an example.