Budget Cuts and Who Absorbs Them
When budgets are cut, the first programs to go are those without dedicated funding or legal mandate. Many of those programs serve low-income, disabled, and vulnerable populations. New Jersey is in a period of fiscal austerity. The state is facing a structural deficit of roughly $1.35 billion and the last two budget cycles have followed the same pattern. The FY2026 budget cut higher education by more than $400 million. The FY2027 proposal defunded free health clinics, a Trenton maternal health initiative, palliative care programs, the Kindersmile Foundation’s free dental care for kids, and the state’s only center for Tourette syndrome. In a time of austerity, targeting social services for the most vulnerable, each cycle leaves programs wondering who will be next.
Residents absorb these losses while paying the nation’s highest property taxes, and voters name taxes and affordability as the state’s top problems. This did not happen by accident. As the New Jersey Policy Perspective documented in its 2019 article “It’s Time to Face the Music, Jersey: We’ve Been Robbed,” a decade of trickle-down tax cuts, much of which has mostly benefited the wealthy and large corporations, has left New Jersey without $2 billion in critical annual revenue.
The state budget itself can be considered a moral document: a statement, made in dollar amounts, which outlines the financial needs that are prioritized by government. This process is difficult for many New Jersey residents to follow, as it is across most of the country. NJ local budget law requires only one advertised public hearing, with the ability to introduce amendments without any hearings. Understanding government budgets and their approval process can feel like an illegible language to non-specialists—line items, statutory reserves, appropriations caps.
Barring ordinary citizens from the budgeting process has consequences on two levels. Historically, skewed representation and lack of diversity over fiscal decisions denied minority groups the opportunity to build generational wealth through redlining, urban renewal, and exclusionary zoning. It is a self-perpetuating problem: those with wealth gain the influence to bend the budget further toward their own interests while closing the door behind them, a dynamic made evident by the trickle-down tax cuts and deficit they produced. If communities now losing their health clinics had been given meaningful opportunity to decide where their tax money flowed, would they have voted against their own interests?
Americans’ dissatisfaction with this arrangement is well documented. A 2024 Pew Research Poll found that 85% of Americans believe elected officials don’t care what people like them think, 70% believe ordinary people have too little influence in public affairs, and only 4% believe the political system is working extremely well. Residents do show up. Some attend council and school board meetings and make an effort to communicate to and with their public representatives, but their perspectives may not always be heard.
When Residents Decide: Participatory Budgeting in Brazil
In 1989, Porto Alegre, Brazil, emerging from decades of dictatorship, deep inequality, clientelism, and a profound distrust of political institutions, implemented participatory budgeting (PB): a process in which residents directly decide how a portion of the public budget is spent. The redistributive outcomes within a single decade were remarkable. Education and health spending rose from 13 to 40 percent of the budget; water and sewer access expanded from 75 to 98 percent of households; poorer districts gained roughly 30 kilometers of paved roads annually; infant mortality fell from 37.2 to 13.8 per 1,000. At its peak, 40,000 residents were participating. All of this was achieved by reallocating where money was spent, not by collecting more of it.
Political theorist Michael Menser called this concept true democracy; a system that “enables individuals and groups to better determine the conditions in which they act and relate to each other.” The model exploded internationally on the strength of its success. Today there are more than 11,500 PB processes worldwide.
The Global Travel of Participatory Budgeting
As Baiocchi and Ganuza have documented, participatory budgeting lost what made it effective in its global travel. Substantive PB has two dimensions. The communicative dimension—idea generation by the community, open assemblies to discuss those ideas, popular voting on winning projects—travelled well. The empowerment dimension did not—how much money is at stake, the primacy of the forum as sovereign over regular political channels, the degree of citizen oversight and monitoring, and crucially, the constitutional question of whether participants can rewrite and amend the rules themselves. The malleable procedure that made PB attractive across the political spectrum turned it into a legitimating process for the status quo: administrations embrace it because of its open dialogue for the community to voice its needs without ceding real authority.
New Jersey’s own experiments illustrate the difference. In 2022, Jersey City Mayor Steve Fulop launched a participatory budget pilot awarding $50,000 per ward: city departments consolidated and scoped residents’ ideas, followed by a one-week online vote to select the top proposal. However, critics alleged the pilot lacked community outreach beforehand and follow-up afterward. Residents largely voted for tree planting, but when the Participatory Budgeting Project invested these efforts they and found no trees had been planted from the funding.
Elsewhere, Freehold Borough has made different efforts to implement a participatory budgeting model. Since 2018, it has awarded $200,000 per year through a permanent committee of residents and city staff for a borough of 12,000 residents. Both programs started as top-down implementation by their mayors, but only one committed to building the infrastructure.
This pattern with participatory budgeting has led to questions of its true effectiveness. Before residents propose anything, government officials have already decided the parameters, the funding source, how much money is awarded, the eligible categories, bindingness and accountability following votes. Thus, the essential question becomes: who designs the design, and can participants rewrite it?
Participatory Budgeting in New Jersey
Why hasn’t participatory budgeting spread further in New Jersey? Nisha Thompson, NJ Advocacy Manager at the Participatory Budgeting Project, has indicated that one significant factor is scale. The Garden State has 564 municipalities, most of them small. When the mayor and council aren’t paid and there are only a few part-time staff, PB is an “extremely disruptive, intensive process” to ask of anyone, let alone a municipality that is understaffed and unpaid. The big-city case studies of New York, Seattle, and Chicago don’t resonate here. PB in the United States runs almost entirely on discretionary funds, and small townships don’t have large amounts of them, which is a problem the $2 billion revenue hole compounds statewide.
Towns don’t have to wait for big discretionary budgets. “There’s a big appetite for innovative solutions,” Thompson points to money already sitting on the table: cannabis tax revenue, Community Development Block Grants, developer fees that many towns never collect or even ask for. The Trenton-Towne Market has shown the ground-up version is possible: a volunteer steering committee runs PB on a share of farmers’ market proceeds, focused on food security, neighborhood beautification, and environmental justice, all without involving city hall.
Residents should be put in the design room for participatory processes, and participation should not be relinquished solely to the voting booth. The scope of PB could be much larger as well. Residents could vote for more than where trees get planted or which parks get benches. As Jersey City confronts a $255 million deficit with services cuts and double-digit property tax increase, and school districts across the state cut teachers as residents pay record school taxes, and decades of taxes for highest earners being slashed, residents have a claim to the larger conversation about how much revenue is raised and who has raised it. It is their tax money after all.
“People do want to participate more,” says Thompson, “and people do want to understand each other better… You’re actually building a way for people to deal with conflict…instead of going to the same six people and yelling at them for hours about why the choice they made … [that you did not want] … is no longer working. That model is not getting us anywhere, and I think that’s where people are.”
That larger claim is what Michael Menser calls ‘maximal democracy’: “cooperative power, that is, the ability to act with others to enhance the capacities of and obtain benefits for individuals while reducing inequalities among all” and a state shaped “not by corporations but by inclusive communities driven by municipal workers, elected officials, and ordinary citizens working together.” Whether PB expands in New Jersey will depend not only on resident interest but also on local governments’ willingness to allocate resources and authority to the process.