This post is part of a Civic Parent’s series, Take Your Seat at the Table: A Taxpayer’s Guide to Decoding Your City Budget. This series is a plain-language walk through New Jersey’s Municipal User Friendly Budget (UFB).
In my last post, I wrote “Where the Money Goes: Local Government is Mostly People Cost” which pointed to structural expense. Since then, Jersey City’s new mayor, James Solomon, published “Jersey City Emergency Financial Report” which spoke to structural imbalance in the Jersey City budget.
Tab UFB “4” points to this imbalance for a local NJ municipality.
What is Structural Imbalance?
Generally speaking, a structural imbalance points to inability to pay the recurring bills with stable, recurring income. Intuitively, every adult understands this…it’s like:
- if your day job (regular paycheck) cannot pay for your rent and groceries (regular expense)
When structural imbalances exist, they require structural adjustments to fix the paradigm. Again, this is intuitive to the average adult who’s had to manage their own personal finance; if, for example, you lose your job, you may need to downsize your housing cost by moving to a lower-rent apartment. That change (moving) is structural. It’s more than trimming the budget by eating out less…it’s an actual move.
Governments are posed with similar challenges when budgeting: regular income must pay for regular expense.
Government Context
Local government is complicated; policy, law, and politics are just a few of the factors that complicate this landscape, making “government” more complicated then the simple scenario I referenced above.
So I’ll share this post in the spirit of the major, broad points in the hopes that you’ll be encouraged to use these budgetary tools not as end points, but as launch points, for learning.
A key upfront insight is this: regular government income includes the property tax. Regular government expense includes people cost (salaries and benefits). A premise with our local governments is that property tax funds people cost. This is not my assertion; this is a premise that we can derive from how our budgets are setup and managed.
I would argue: we’re facing challenges at the local level that are challenging this very premise; it’s complicated, it’s worth dialoguing about, it’s definitely worth better understanding.
To understand, one thing we have to do – as a community – is probe the numbers and anchor around a common set of facts.
A focus on UFB Tab 4
Tab “4” of the UFB points to structural imbalance if a municipality has an imbalance. For some towns and cities, this page may be blank. But not Jersey City; it had a laundry list of items in 2025 (and prior years) so I’ll use it as an example.
For example we can see Jersey City had “revenues at risk” in 2025:
- $33 million sale of municipal properties
- $90+ million abatement “PILOT” fees (Mayor Solomon cites $12M of declining pilot revenues contributing to the 2026 budget deficit)
We can also see imbalances related to expense. If you go back to Jersey City’s 2023 budget you’ll see rising healthcare costs and collective bargaining agreements cited on this page.
You can revisit earlier years’ budgets on the city’s Financial Reports page (link here). You’ll see the imbalance playing out over time.
Abatements as Structural Imbalance and the Policy Trade-offs
In Jersey City, one item we’ve seen repeatedly on this tab (2025 and in prior years) is abatement revenue.
Advocates and taxpayers in Jersey City may be familiar with the abatements. I’ve written about it extensively on Civic Parent and there is nuance to explore so I do not want to oversimplify; but one clear trend is: abatements have been a structural revenue pillar in Jersey City for years.
However, the “abatement pillar” is not the same as property tax. Because abatements have a fixed length, and then expire. And when they do, their structure changes.
I’ll explore that change in the next post which will involve a look at Tabs UFB-5 (Tax Base) and UFB-6 (Abatements).
In Closing
Further reading helps give context to the complexity around government imbalance. I’m sharing here in case it’sh
Check out the other posts in this series.
- Setting the Table: What You Need to Feel Included. A starting explainer if you’re new to New Jersey or are brand new to local budgets.
- You Belong Here: How Your Tax Bill Connects to the City Budget – Using UFB Page 1 to see the three local governments—city, county, and schools—and how each as its own “levy” and tax rate.
- Following the Money: Where the City Gets Its Income – Using UFB, Page 2 to see city revenues. Use a free Google Worksheet tool to join me in the analysis.
- Spending the Money: Where the City’s Dollars Go – Using UFB, Page 3 to see city expense
- Coming soon: The Ground Beneath It All: Understanding the City’s Tax Base – Using UFB, Page 5 to understand the real estate landscape.
- Coming soon: Incentives and Discounts: A Closer Look at Abatements and PILOT Revenues– Using page 6 to see more clearly the abatements and PILOT revenue on the city’s books
- Coming soon: The People Behind the Numbers: Payroll, Benefits, and Time Earned – Using UFB, Pages 7–9 to understand “people cost” — payroll, healthcare, and accumulated absences
- Coming soon: Community IOUs: Understanding City Debt and Long-Term Promises – Using UFB, Page 10 to see details about municipal debt.
- Coming soon: Working Together: Insight into Share Services Across Municipal Borders – Using UFB, Page 11 to learn about shared services
