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.
Some pointed questions I’ve gotten around the city budget are: “what is the biggest expense?” and “how much does the city spend on public safety vs public health?” and “how much does the city spend on youth programming?” These are all questions that relate to the expense side of the budget. We can answer these and other questions using public data.
Municipal Expense – a Primer
So — what does the city spend its money on? We can look at the expense side of the budget to answer this, but an important upfront note: the city is using expense categories defined by the state (so some of this is necessarily “clunky” to read through). If you’re interested in learning more about these expense line items (beyond what I’ve highlighted below), you can view this account listing published by the state (it’s an interesting document that gives nitty gritty details on various expense items).
This is how municipalities in NJ break out their expense:
- Operations “within CAPS” – this is structural, recurring operating expense. This is where most of the employee-related cost is, like salaries, healthcare, and retirement benefits. Of note: “within CAPS” refers to state-mandated caps on how much this expense can increase each year per a state formula (which is beyond the scope of this post).
- Operations excluded from CAPS – this is where additional recurring expense sits and it includes private or federal and state grant-funded programming (i.e. items that passthrough the budget with their own revenue source), along with the maintenance of the public libraries and, this year, emergency rental assistance.
- Capital improvements – expenses related to the capital budget, which deals with long-term assets like buildings and land.
- Municipal debt service – bond related expenses like payment of interest and principal.
- Deferred charges, Judgments, Local school district bond expense, and Reserve for uncollected taxes – these are much smaller areas of expense that you can read about here (they are beyond the scope of this post).
The Highlights, based on the 2021 proposed budget:
- The 2021 proposed budget has $621 million in total expense.
- The largest portion of expense is $488 million of “Operations within CAPS“, which contains employee salaries, healthcare, and retirement benefits. Operations within CAPS is 79% of the total budget and includes departmental expenses that you can explore in the visualization below.
- What’s changed:
- Operations within CAPS increased $13 million from 2020 to 2021, due largely to
- +$4.9 million more police and fire retirement costs in 2021 vs 2020
- +$3.3 million more for traffic and engineering salaries within the Department of Administration
- +$2.8 million more for Department of Health & Human Services
- +$1.8 million more for Department of Youth & Recreation
- Here is what decreased:
- $50 million reduction in “Public and Private Programs Offset by Revenues” — these are expenses funded by private contributions or state or federal grants. An example in this year’s budget is “Emergency Rental Assistance,” which is funded by the US Department of the Treasury; it shows up as a revenue item and as an expense item. I have been told this can change throughout the year as programs are authorized; regardless, these items “offset” each other (revenue offsets expense) with a neutral impact to Jersey City taxpayers
- $27 million reduction in “2020 Cares Act Operations,” which is $0 in 2021 (so this was a one-time pandemic-related expense in 2021).
- Taken together, these two items are driving the total budget down by $70+ million.
- Operations within CAPS increased $13 million from 2020 to 2021, due largely to
The key insight here is the structural expense and how that’s increasing. That, in tandem with a decreasing city levy this year (made possible with federal aid and other items that I detailed in my previous post) makes for an interesting dynamic between recurring revenue and expense that taxpayers can keep their eyes on in the years ahead.
Highlights are detailed in the Tableau visualization below. Please also check out the “Key assumptions and factors” at the bottom of this post for more detail on these categories.
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 expense categories are defined by the state in a budget template file you can view here. For the most part I retained the state-defined expense category nomenclature.
3–If you’d like to learn more about these budget categories, the state publishes a document here that lists major categories of revenue and expense, along with detailed “FCOA” (flexible chart of accounts) detail.
4–The filters used in the visualization are drawn from five data points in the original dataset: the main expense category, the department or area under that main heading, the detail within each department (eg director’s office), the expense detail (e.g. “salaries & wages), and the “Sheet” indexing reference used at the bottom of each page of the budget document. See below for an example.
5–Here is an example of “Public and Private Programs Offset by Revenues”:
