Rahway's 2026 Budget Grows Again, Driven By Health Insurance Costs
The city's spending plan is up sharply this year. Most of that growth traces back to one line.
Rahway City Hall (The Central Jerseyan)
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Chris Howell | June 10, 2026
Rahway property owners will pay $84 more on average to help cover the city’s budget. That works out to roughly a 2 percent increase.
Business Administrator Matthew Pukavich delivered that number to the City Council on July 6, the night the council introduced Rahway’s 2026 municipal budget. He also explained what pushed spending higher this year.
“As you know, we face some unprecedented challenges this year, such as the massive increase in the state employee health benefit plan, inflation nationwide, increased fuel costs, and utility costs,” Pukavich told the council.
Pukavich also credited Mayor Raymond Giacobbe with securing $2.175 million in last-minute state aid, money that helped soften this year’s tax increase.
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Despite the financial challenges, the administration delivered a balanced budget. Besides raising taxes, the city also raised an additional $4.2 million in miscellaneous revenue. It is also drawing $5 million from its surplus this year, up from $3.3 million last year. That leaves about $11.15 million in reserve, out of a $16.15 million surplus balance the city had heading into 2026. The city’s full 2026 budget comes to nearly $80 million.
Most of the new spending has little to do with paychecks, up $1.2 million from last year. City workers are getting raises, but the bigger driver sits inside a broader budget category called “other expenses,” which covers everything from employee insurance to utility bills.
Health insurance for city employees is the single largest piece of that category. The cost of coverage jumped by nearly 30 percent this year and accounts for nearly half of “other expenses” for 2026. Earlier this year, the city council passed a resolution calling on state lawmakers to address rising health care costs.
Other notable increases include $630,000 in library maintenance spending, now topping $2 million in total, and a nearly 80 percent jump in general administration spending, from $475,000 in 2025 to $853,000 in 2026.
When it comes to public safety, the police department’s overall budget rises about 10 percent to $11.08 million, while the fire department’s budget falls roughly 3 percent to $6.91 million.
Zoom out further, and Rahway’s total spending has grown by more than a third since 2021. Over the same time period, the city’s tax levy increased 17 percent.
The budget also includes utilities. The water utility budget increases 23 percent, to $13.1 million. The sewer utility budget remains relatively flat, increasing by $116,000, or 1.5 percent. And the parking utility budget increased by $500,000, up 24 percent.
Rahway’s debt has grown steadily but modestly over the past five years, rising from $50.3 million in 2021 to $53.9 million this year, a 7 percent increase. Add in what the city owes on its water and sewer systems, along with its parking utility, all of which residents repay through utility bills rather than property taxes, and the total climbs to $96.6 million, up nearly 18 percent since 2021. The city’s annual debt payment jumped nearly 9 percent in 2026, the sharpest single-year increase in six years.
The City Council will hold a final vote on the budget during its August 3 meeting, officials said.
Editor’s note: The Central Jerseyan is free to read and supported by advertising. If you value this kind of local reporting and want to help sustain it, you can become a citizen supporter on Patreon. Your contribution helps fund continued coverage of local government, schools, and community issues.