This is a quick update to my 2021 municipal budget series which I wrote this summer based on the budget introduced in June 2021. On August 31st 2021, the city council approved the budget in its final form with some changes. I wanted to briefly summarize those changes and also close the series with some constructive thoughts around how the city could improve things going forward, at least from the perspective of an outside/taxpayer experience.
Differences between June 2021 introduced budget and August 2021 approved budget
What changed, from the introduced budget in June 2021 to the final budget in August 2021*:
- Revenue changes:
- the levy cut was lessened from $68 million to $50 million (the introduced budget’s levy was $213 million but the approved levy was $223 million)
- the city is using less federal ARP aid on revenue side; the introduced budget used $78 million but the final budget used $27 million
- Expense changes:
- structural expense, instead of increasing, was instead cut by $30 million. This included cuts to police and employee health insurance
Wrapping up & closing thoughts
In effect, the city retained its tax cut (albeit slightly smaller) but is relying less on one-time federal ARP aid and instead cut some structural expense. I see these as improvements, at least in principle, as there is less dependency on the one-time federal aid for purposes of funding structural expense. That said, nuance exists and some questions we could ask include:
- What is the service impact of the expense cuts? Specifically, what does it mean operationally that police and employee health insurance were cut from last year? Is this based on attrition (retirements, resignations) or some other factor?
- The city levy cut was part of a structural shift with the school levy this year. The city could manage the cut because of federal aid filling the gap left by the levy cut. The school levy may have to keep increasing to keep filling the gap left by state aid cuts. How will the city fund its structural expense after the federal aid expires in 2024? Is it relying on tax base growth? More abatement PILOTs? City tax increases?
- Why did does the city wait until three-quarters through the year to pass its budget? What effect does this have on the city’s ability to manage its finances on a go-forward basis?
Ideas for improving transparency in Jersey City
Writing this series invited lots of questions around transparency and taxpayer engagement. I’ve listed some of them, in the spirit of “how could this process change for the better?”
- The city could approve its budget sooner in the calendar instead of waiting eight months into the year.
- The city could provide the budget in CSV/Excel format on its website as a standard operating procedure each year. They currently only publish it in PDF.
- The city should (not could, but should) publish its adopted budget in both regular and “user friendly” form. Currently, the user friendly budget is only available in “introduced” form.
- The city could visualize the budget in Tableau dashboards, similar to what they’ve done for COVID19 data. I showed very basic versions of possible dashboard views in my municipal budget series to help imagine what’s possible.
- The city could proactively engage the community around the budget and invite taxpayers to better understand where money comes from and how it’s invested in the city. Kind of like “budget teach-ins.”
- The city could seek community feedback, in community, instead of pushing most feedback into a second reading ordinance when the budget is up for a vote.
- The city could publish non-mandated data to help inform the budgetary and property tax picture, such as when tax abatements begin (the year the building opens and starts paying PILOT fees to the city) and end (the actual year of expiration).
- This is just a starting list, but I’ll add one final point that the city could ask a basic question: “what questions do you have about the city budget” and then work to answer each question point by point and put the information up on the city website.
I’m not saying any of this is easy, but it’s important because the budget is the most fundamentally informing document/shared resource we can all collectively better understand. What we fund determines what we receive, what we prioritize, and what we value; from public safety to affordable housing to youth and recreation. When we follow the money, we see the reality, meaning we see through vacuous press releases and political sound bytes.
I hope this series has been helpful. I encourage all taxpayers to engage your elected representatives with proactive, probing questions and learn more about how your local government both collects and spends its money.
- Here are snapshots from the 2021 INTRODUCED budget vs 2021 APPROVED budget, showing comparisons of summarized Revenue (picture 1) and summarized Expense (picture 2)
Summarized Revenue Comparison:
Summarized Expense Comparison:
