Mayor Jabbour announces new 2026 budget process after  S&P outlook revision

Mayor Emily B. Jabbour today announced S&P Global Ratings assigned a negative outlook to Hoboken’s bond rating, citing the City’s reliance on reserves to offset  expenses, as well as the Administration’s new transparent budgeting process to take corrective action. 

While the current rating remains unchanged at AA+, the negative outlook signals that the credit rating agency sees risk that could lead to a downgrade in the next 12 to 24 months if the City’s financial position does not improve. A lower bond rating would likely increase the cost of borrowing for capital projects like infrastructure improvements, placing additional pressure on taxpayers, and reducing the City’s financial flexibility.

Over the past decade, adopted budgets increasingly relied on short-term solutions such as the use of reserves to limit tax increases and cover recurring expenses. While this approach reduced immediate impacts on taxpayers, it created structural gaps between recurring costs and recurring revenues. 

Reserve balances are intended to protect the City during emergencies, economic downturns, or unexpected expenses. Continued reliance on reserves, also known as surplus or emergency funds, to balance annual budgets is not sustainable and can limit Hoboken’s ability to respond to future challenges. 

Key factors contributing to current pressures include: 

• The use of reserves to support day-to-day operations; 
• Delays in fully funding known recurring obligations, including employee contractual obligations; 
• Rising inflation and increased service demands; 
• Rising healthcare costs; and 
• Rising costs outpacing revenue growth allowed under New Jersey municipal budget laws. 

“The structural issues identified by S&P were developed over multiple budget cycles during periods of rising costs and economic uncertainty,” said Mayor Jabbour. “Hoboken used emergency funds to minimize short-term tax impacts, but that approach is not sustainable. As Mayor, it is my responsibility to confront these challenges directly and restore structural balance to put the City on a stronger long-term path. While the City remains financially stable and continues to meet all of its obligations, this outlook underscores the need to take corrective action now.” 

As the City enters the 2026 budgeting process, the Jabbour Administration is focused on introducing a budget that will: 

• Align recurring revenues with recurring costs 
• Preserve reserves for their intended purpose 
• Make financially responsible decisions that are fair to current and future residents 

To that end, Mayor Jabbour today announced a new, more transparent and community-driven budgeting process designed to address long-standing financial pressures while strengthening public trust. 

For the first time, the City will launch the annual budget process with a public survey and a series of open workshops before introducing a proposed budget. The new approach will give residents an opportunity to better understand financial constraints and participate in meaningful discussions about tradeoffs before budget decisions are finalized. 

The 2026 process will begin with: 

• A citywide public budget survey to gather input on community needs and services 
• Public workshops to explain cost drivers, legal constraints, and financial realities 
• Open dialogue about spending tradeoffs and revenue limitations 
• Clear communication before a formal budget is introduced 

“This is not about assigning blame; it’s about rolling up our sleeves and addressing these long-standing budgetary issues through honest conversations and difficult choices,” said Mayor Jabbour. “There are no quick fixes, but residents deserve to understand the full picture of the financial landscape and have a voice in shaping the path towards long-term fiscal responsibility.” 

Additional details regarding the public survey and workshop schedule will be announced in the coming days.