Statement

Governor’s Budget Advances Fiscal Responsibility But Structural Problems Remain

Governor Murphy's final budget proposal takes important steps toward fiscal responsibility but falls short of closing the structural deficit.

By

Published on Feb 25, 2025 in Tax and Budget

Earlier today, Governor Murphy unveiled his final budget proposal for Fiscal Year 2026. The proposal includes critical revenue-raising measures, such as an expanded fee on property sales over $1 million, but also cuts grant funding for programs that provide essential services to working families across the state. While Governor Murphy followed through on his commitment to fully funding public schools and pension obligations, the structural deficit remains over $1 billion with a surplus that would cover barely a month of government operations in the event of an economic downturn. In response, New Jersey Policy Perspective (NJPP) issues the following statement:

Nicole Rodriguez, President, NJPP:

“New Jersey’s state budget desperately needs new revenue to make health care, housing, and transit more affordable for working- and middle-class families while addressing the widening structural budget deficit. With federal funding cuts looming on the horizon, the Governor’s budget proposal takes an important step towards fiscal responsibility by increasing revenues through targeted measures like the expanded realty transfer fee while maintaining full funding for key commitments for public schools and pensions.

“However, even with these efforts, the budget still leaves the state vulnerable — failing to close the structural deficit or build a surplus ample enough to withstand federal cuts to critical programs like Medicaid. While families are struggling with basic costs, the proposed budget does not expand the Child Tax Credit or income assistance for working-class households, and it cuts back on grant funding for nonprofits and community programs. Yet, the budget finds room to fund StayNJ, an expensive homeowner subsidy program that would help wealthy households, even though it fails to meet the required fiscal responsibility guardrails set out in the original law.

“Rather than diverting funds from affordable housing and other essential services to fill budget holes, New Jersey needs more progressive, sustainable revenue solutions to build an equitable state for all residents — not one that forces cutbacks for the programs they rely on.”

Read NJPP’s latest budget analysis, What to Look for in the New Jersey Budget for Fiscal Year 2026.

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Author

  • Nicole Rodriguez, Research Director, is an experienced public policy advocate who researches and advocates for state policy solutions that centers the needs of communities. She is skilled in policy analysis, research, writing, communication, and nonprofit organization and management. Her research interests include labor and economic policy at the intersection of work and family.

    Before joining New Jersey Policy Perspective, Nicole was a Senior Researcher at Community Labor United (CLU), an organization that brings together community and labor partners to speak in one voice on issues that impact working-class families throughout Greater Boston. Specifically, Nicole drove strategic campaigns forward with rigorous research and leadership that stabilize and strengthen low-income families and communities of color.Prior to that, Nicole worked as a Senior Policy Analyst at the Massachusetts Budget and Policy Center, an independent research organization that produces non-partisan policy research, analysis, and data-driven recommendations focused on improving the lives of low- and middle-income children and adults, strengthening our state’s economy, and enhancing the quality of life in Massachusetts. Nicole has authored numerous reports focusing on family economic security and the state budget.

    She has also worked for foundations, non-profits, and state and local governments in Massachusetts. She holds a Master’s in Public Policy from the Heller School for Social Policy and Management at Brandeis University and a Bachelors of Arts in Political Science from Villanova University.

    Email: rodriguez (at) njpp.org | Phone: 609-393-1145 ext. 18
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