THE HEADLINES

• The administration began the budget process with a projected municipal tax increase of approximately 24%.

• After budget workshops and preliminary input from the City Council, Mayor Jabbour ultimately introduced a budget reflecting an increase of approximately 19%.

• The final municipal tax-rate increase was reduced to 11.5% and approved by the City Council by a 6–3 vote.

• The final combined property tax increase is 10.7% including municipal, county, school, library, and open-space taxes.

WHAT EVERY RESIDENT SHOULD UNDERSTAND

• Hoboken's 11.5% municipal tax increase was driven primarily by:

  • the cost of significant investments in infrastructure, resiliency, and open space which I describe in more detail below.

  • avoiding a credit-rating downgrade due to depleting surplus reserves - Hoboken Hospital’s recent nonpayment of $4M in taxes, parking fees, and utility obligations accelerated that pressure.

• More than half of the combined overall 10.75% increase came from the Hoboken School Board’s approximate 21% tax increase.

• Your August bill is 21.5% higher than May’s - double the annual 10.7% increase - because the entire annual increase is absorbed by the final two quarterly tax bills.

• Your February 2027 bill will reduce by 9%.

THE FINAL 2026 BUDGET IN SUMMARY

As I always do, I spent countless hours analyzing the budget, building financial models, reviewing assumptions, identifying savings opportunities, and working with my colleagues to reduce the increase as much as responsibly possible.

The difference between where we started (approximately 24%) and where we ended (11.5%) was months of work by Councilwoman Imus, Council President Ramos, and me to identify savings, reduce spending, use existing resources more effectively, rebuild reserves responsibly, and protect essential city services.

Rather than placing the full burden on taxpayers in a single year, we advocated for a measured, multiyear approach that would maintain Hoboken's financial strength while giving the administration time to address longer-term structural costs, including healthcare, labor, and staffing expenses.

We worked with all of our colleagues to build consensus around a responsible path forward and ultimately, agreed a compromise with 6 City Council votes, enough to pass the budget.

The final budget / compromise included:

• an 11.48% increase in the municipal tax rate;

• $4M less reliance on surplus reserves;

• $850k relating to a head-count freeze

• $1.4M more in operating reductions;

• ~ $2.9M more in additional revenues;

• restoration of Hoboken's reserve ratio to approximately 8.4% to avoid a ratings downgrade, with additional improvements projected in future years; and

• preservation of essential city services.

The result was a budget that addressed immediate financial concerns while establishing a sustainable path forward.

HOW WE GOT HERE

We didn’t get here because of "$20 million in one-time fixes" or because taxes were somehow "artificially held below inflation." That is not what happened.

For the past decade, I have led the effort to keep taxes as low as responsibly possible while preserving services, strengthening Hoboken's finances, and investing in our community. Throughout that time, I have consistently opposed balancing budgets through large, one-time measures, and we have not done so.

There are really two parts to this story.

PART 1: Investments and Rising Costs Over Time

Over the past decade, Hoboken has made significant investments in our community. Many of them were important, many were long overdue, and many I strongly supported.

Among them were:

• Southwest Park and resiliency infrastructure, including the expansion project;

• Northwest ResilienCity Park and resiliency infrastructure;

• Union Dry Dock acquisition;

• the new DPW garage;

• Church Square Park improvements;

• emergency waterfront repairs;

• ongoing water infrastructure improvements;

• road improvements; and

• other resiliency efforts.

To fund these projects, Hoboken assumed more than $200 million in additional debt beginning in 2016.

As a result, annual debt-service costs increased from approximately $9.8 million in 2016 to approximately $21.3 million in 2025, with an additional $3.3 million increase in debt service for 2026 alone. That single increase represented approximately five percentage points of the proposed tax increase.

At the same time, Hoboken's healthcare and labor costs continued to rise:

• Healthcare costs, which had remained relatively stable at approximately $20 million to $22 million annually, increased significantly, including an additional $2.8 million projected for 2026 alone.

• Public safety staffing levels expanded to address growing safety concerns.

• The city entered into an above market, eight-year labor agreement with the Hoboken Police Department that will continue to affect future budgets and may establish a costly precedent for future labor negotiations.

As residents know, I supported some of these decisions and opposed others when I believed they were not adequately justified or financially sustainable.

But We Did Not Sit Still

Throughout this period, the city worked to expand revenues and control costs. These efforts included:

• restructuring the city's water contract in 2018, an effort I led that freed more than $2 million annually;

• expanding the Open Space Trust Fund in 2019;

• securing grants and favorable financing;

• increasing use fees associated with parking, recreation, water, trash collection, and other services; and

• growing Hoboken's tax base.

And yes, taxes increased along the way, generally tracking inflation.

But the reality is that costs increased faster than revenues because of the significant investments we have made to improve our city.

And We Are Not Finished

Significant investments remain ahead, including:

• Maritime Park (Phase I underway);

• Sinatra Drive widening (starting soon);

• Church Square Park renovations (Phase II not yet started);

• Tommy Oliveri Park improvements (underway);

• 800 Monroe project (still in planning);

• Midtown Garage rehabilitation (underway);

• Willow Ave upgrades (still in planning)

• restoration of the 916 Garden Street garage (still in planning);

• lead service-line replacement (about to begin);

• water-main improvements (continuing annually); and

• road improvements (continuing annually).

  
  

PART 2: The Immediate Pressure of Declining Surplus Reserves

Think of surplus as the city's savings account. Each year, we draw from it while replenishing it through stronger-than-expected revenues and lower-than-expected expenditures.

Between 2023 and 2025, Hoboken's surplus declined from approximately $17.6 million to approximately $10.4 million, an unsustainable level for supporting the 2026 budget and maintaining Hoboken's long-term financial stability. As a result, S&P revised the city's outlook from stable to negative.

The decline was driven by several factors, including the failure of Hoboken Hospital's owners to pay taxes, parking fees, and utility obligations during a period of financial distress.

While Mayor Bhalla served on the hospital board, those unpaid obligations accumulated to more than $4 million and contributed significantly to the city's declining surplus balance. These obligations were not publicly disclosed at the time.

Fortunately, these losses appear to be largely nonrecurring. Mayor Jabbour negotiated a repayment agreement that is expected to return approximately $3 million to the city by the end of this year.

WHY YOUR AUGUST TAX BILL LOOKS SO MUCH HIGHER

Although the annual increase was 10.75%, the August and November bills increased 21.5% - or double the annual increase.

The reason is simple. Property taxes are billed in arrears. And because the February ‘26 and May ‘26 bills were based on 2025 taxes, the entire 2026 increase was incorporated into the final two quarterly payments rather than spread across all four quarters.

Because of this schedule, your February ‘27 bill will reduce by 8.9% - reflecting 1/4 of 2026 total tax - and stay flat in May ‘27.

You can see how this works, and specifically how it applies to your own property by going to the Property Tax Calculator I created.

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