Topic Category: Tax and Budget

Five Budget Time Bombs Facing the Next Governor

Posted on by Peter Chen

Governor-elect Mikie Sherrill is going to inherit a budget full of hidden dangers. On the surface, the state’s finances appear healthy: historic cash reserves, an improved credit rating, and on-target revenues. But beneath these gains lie budget time bombs that threaten the state’s fiscal stability and any new spending proposals.[1]

At a time when low- and middle-income families face rising costs and housing shortages, each of these time bombs will limit the state’s options for addressing residents’ needs.[2] These risks come on top of economic uncertainty, including a potential recession, which would reduce revenues and increase state costs.[3]

1. Existing structural deficit

Responsible budgeting requires sufficient revenue to fund schools, health care, and other essential services. In Fiscal Year (FY) 2026, New Jersey will generate $1.5 billion less in revenue than it needs to cover expenses.[4] As a result, the state will have to spend down its cash reserves, which have fallen each year from $10 billion in FY 2024 to less than $7 billion projected for FY 2026.[5] This imbalance means Governor-elect Sherrill will need to raise revenues or cut services simply to keep the state from going deeper into deficit.

Several factors drive this shortfall. State spending on property tax relief programs has grown from less than $1 billion to more than $4 billion in FY 2026, with future increases in Stay NJ (see below).[6] Expansions to economic development tax credits also reduce revenues. These credits give state tax dollars to corporations such as film studios or AI data centers for operations in New Jersey and remove billions in expected revenues.[7] Other increases in funding are mandatory to meet the state’s obligations to its pension funds and schools.[8]

NJPP has long advocated for increased progressive revenues to help close this gap.[9]

2. Ballooning Stay NJ costs

Housing affordability is a concern for seniors on fixed incomes. But Stay NJ, a new homeowner tax credit, threatens to dramatically increase the FY 2027 budget without targeting those who need help most. Stay NJ provides credits to homeowning seniors over age 65 with incomes up to $500,000.[10] In FY 2026, Stay NJ required only $280 million in state appropriations, despite an annual estimated cost of $1.2 billion.[11]

The cost was artificially low for two reasons:

  • The state had saved $320 million from prior years; and
  • FY 2026 only covers one half of calendar year 2026, meaning only half a year’s worth of payments will go out.

 

In FY 2027 neither condition will exist. The full $1.2 billion cost of the program will come due with no additional funding source.[12]

Hidden Costs Will Balloon Stay NJ Payments by $900 Million in FY 2027. Expected costs to state budget in fiscal years 2026 and 2027.

NJPP has identified potential savings by capping income for Stay NJ recipients to limit the program to seniors in need, rather than wealthy households.[13] These changes would reduce the program cost by more than $500 million.

Without reform, the Sherrill administration and legislature will face more than $900 million in additional Stay NJ costs in FY 2027.

3. School funding costs beyond inflation

New state requirements on schools have increased per-pupil funding needed to meet “adequacy,” the state’s standard for a thorough and efficient education.[14] Beyond these existing changes, voices from across the political spectrum have called for updating the school funding formula to more accurately reflect the cost of state standards and educating students from low-income families and who are multilingual learners.[15]

School funding represents the largest single expenditure in the state budget, with formula payments totaling $12 billion.[16] Even small changes in funding per pupil can result in large cost increases for the state.

School safety and mental health requirements are driving costs higher. The state’s 2026 Education Adequacy Report outlines changes that will increase funding needs.[17] Rising school safety concerns and concerns about youth mental health have driven the need for $14,972 in per-pupil funding for elementary students, an increase of more than seven percent from FY 2025 and 20 percent from FY 2023.[18] These increases fund one security guard per elementary school and mental health support for students.[19] Although these costs were included in the FY 2026 school aid calculations, many districts hit the six percent cap on aid increases, pushing additional costs to FY 2027.[20]

4. Loss of remaining pandemic-era funding

The fiscal cliff of expiring federal pandemic-era funding is creating funding gaps that the state will need to cover. For example, the expiration of federal funding for New Jersey Transit led to an enormous projected deficit that required the creation of the Corporate Transit Fee.[21]

Programs ranging from infrastructure to child care will lose federal funds when funding expires at the end of 2026.[22] These expirations have real effects, as the state’s child care subsidy programs were temporarily closed to new enrollees due to lack of funding and only recently began accepting new applications.[23]

New Jersey has also exhausted the last of its Debt Defeasance and Prevention Fund, a $10 billion reserve created to refinance high-interest debt during the pandemic.[24] The state used the fund for debt retirement and new capital improvement projects. But the state budget also transferred $1.1 billion to patch the structural deficit.[25]

With the fund empty, that revenue will not be available in future years, limiting the
state’s options.

5. Increasingly expensive state health benefits

The State Health Benefits Program provides health insurance for state and local government employees, with costs shared by employees and employers.[26] State actuarial reports recommend premium increases that would raise costs by 20 percent or more.[27] Even if proposed savings materialize, the state budget will face employee health benefit cost increases above inflation.[28]

Health benefits for active state employees and higher education employees cost $2.0 billion annually. Even small percentage increases can have large budget effects: a 10 percent increase in FY 2026 raised costs by over $180 million.[29]

Local government health plans face even steeper increases, creating potential state liability.[30] Although local government costs are not the state’s direct responsibility, problems with the local government health plan have previously required a temporary state bailout.[31]

One big unknown: the impact of federal cuts

Federal cuts present the largest uncertainty to the state’s budget. Some costs will fall to the state, even if the exact amount is unknown. For example, the state will have to implement a work requirement program for Medicaid by January 2026, which will require substantial appropriations and infrastructure.[32]

The state will also pay an additional $90 million in administrative costs for SNAP, with $78 million of those costs covered by counties, which administer SNAP in New Jersey.[33]

The Department of Human Services estimates that reductions in federal funding and federal restrictions on state health care revenues will result in $360 million in annual lost funding.[34] These policies will also force more residents to lose health care coverage. The result: a $3.3 billion annual cut in funding to hospitals and public health, which the state may have to backfill through charity care or other means.[35]

Beyond the tax and budget bill, the state faces decisions about whether to backfill federal cuts in other priorities. Keeping New Jersey at the forefront of scientific research may require state investment in cancelled federal biomedical research projects.[36] Delays in funding the Gateway tunnel project may lead to cost overruns and harm New Jersey’s economic growth.[37]

Conclusion

Governor Sherrill will inherit a budget full of time bombs. Despite steps by the Murphy administration to correct for the fiscal shortsightedness of past administrations by fully funding schools and pensions, the FY 2027 budget will face serious revenue shortfalls absent new revenues or drastic cuts. Depleting the state’s limited cash reserves will only deepen the crisis in future years.

There are solutions. NJPP has identified key revenue raisers that focus on concentrated wealth in individuals and large corporations.[38] Expensive tax credit programs that overwhelmingly benefit the already-wealthy can be reduced to increase revenue. New revenue, such as a wealth proceeds tax on net investment income, would also generate funds from wealthy individuals.[39]

Without new revenues, these budget time bombs will make maintaining current funding difficult, let alone any new initiatives the next governor may propose.

End Notes

[1] Ambrose, A. et al. New Jersey Policy Perspective. Sleepwalking Into Catastrophe. July 8, 2025.

[2] O’Dea, Colleen. NJ Spotlight News. NJ’s housing costs are skyrocketing. What will the next governor do? Oct. 20, 2025.

[3] Foster, S. Bankrate. The U.S. economy is slowing — and the nation’s top economists don’t expect it to improve much over the next year. Oct. 23, 2025.

[4] New Jersey Legislature. FY 2026 Appropriations Act Scoresheet. July 2, 2025.

[5] Total opening balance was $10.282 billion in FY 2024. New Jersey Legislature. FY 2024 Appropriations Act Scoresheet. July 19, 2023. Closing unreserved balance in FY 2026 is projected for $6.7 billion. New Jersey Legislature. FY 2026 Appropriations Act Scoresheet. July 2, 2025.

[6] Murphy, P., The State of New Jersey Budget in Brief, Summary of Budget Recommendations Fiscal Year 2026, Feb. 2025, pp. 12-13.

[7] State of New Jersey. Tax Expenditure Report, Fiscal Year 2026. 2025. pp. 10-11.

[8] The pension fund actuarial determined contribution has continued to increase. See New Jersey Legislature Office of Legislative Services. Analysis of the New Jersey Budget Interdepartmental Accounts Fiscal Year 2025-2026. May 2025. P. 6. School funding payments are adjusted by inflation and the Education Adequacy Report discussed below.

[9] Chen, P. New Jersey Policy Perspective. Fair and Square: Changing New Jersey’s Tax Code to Promote Equity and Fiscal Responsibility. Nov. 14, 2024.

[10] Pub. L. 2024, c. 88.

[11] S. 2026 (2025) pp. 280-282. Murphy, P. The State of New Jersey Budget in Brief, Summary of Budget Recommendations Fiscal Year 2026. Feb. 2025. pp. 12-13.

[12] Sobko, K. NorthJersey.com. Could federal budget chaos upend StayNJ property tax program for NJ seniors? (“Treasury officials confirmed there is no “buildup plan” for fiscal year 2027, estimated to cost $1.2 billion annually.”)

[13] Chen, P. New Jersey Policy Perspective. Course Correction: Preserving Senior Housing Affordability While Cutting Costs. Jun. 17, 2025.

[14] N.J. Stat. 18A:7F-46 (2025).

[15] Weber, M. New Jersey Policy Perspective. Resetting School Funding for New Jersey’s Next Decade. Oct. 24, 2025; Kudisch, B. NJ.com. Give N.J. schools more money to teach undocumented immigrants, county says. Feb. 16, 2025.

[16] Murphy, P. The State of New Jersey Budget in Brief, Summary of Budget Recommendations Fiscal Year 2026. Feb. 2025. pp. 15.

[17] New Jersey Dep’t of Education. FY2026 Education Adequacy Report. 2025.

[18] New Jersey Dep’t of Education. FY2026 Education Adequacy Report. 2025. pp. 4-5.

[19] New Jersey Dep’t of Education. FY2026 Education Adequacy Report. 2025. pp. 4-5.

[20] Kausch, K. & Kudisch, B. NJ.com. N.J. is pouring $12B into schools this year. See if your district is a winner — or facing cuts. Sep. 3, 2025.

[21] Reitmeyer, J. NJ Spotlight News. NJ Transit strike halted but financial questions remain. May 20, 2025.

[22] For a full list of spending, see New Jersey Recovery Plan, State and Local Fiscal Recovery Funds, 2025 Report.

[23] New Jersey Dep’t of Human Services, Division of Family Development. Child Care Assistance Program – Important Update. July 2025.

[24] Reitmeyer, J. NJ Spotlight News. Special reserve fund, set up to ease NJ’s bonded debt, runs dry. Aug. 11, 2025.

[25] Reitmeyer, J. NJ Spotlight News. Special reserve fund, set up to ease NJ’s bonded debt, runs dry. Aug. 11, 2025.

[26] New Jersey Division of Pensions and Benefits. Summary Program Description Guidebook For the State Health Benefits Program (SHBP) and the School Employees’ Health Benefits Program (SEHBP). Sept. 2025.

[27] New Jersey Dep’t of the Treasury. Press Release: AON Releases Recommended Rate Increases for State Health Benefits Plans for Plan Year 2026. Jul. 9, 2025.

[28] See Memorandum of Agreement between the Unions and the State of New Jersey. Sept. 4, 2025.

[29] New Jersey Legislature, Office of Legislative Services. Analysis of the New Jersey Budget: Interdepartmental Accounts. May 2025. pp. 25-27.

[30] New Jersey Dep’t of the Treasury. Structural and Financial Challenges in the State Health Benefits Program for Local Government. May 2025.

[31] P.L. 2024, c. 86.

[32] Hinton, E., Diana, A., and Rudowitz, R. KFF. A Closer Look at the Work Requirement Provisions in the 2025 Federal Budget Reconciliation Law. July 30, 2025.

[33] Department of Human Services, Division of Family Development. 2025 House Budget Bill Implications for the New Jersey Supplemental Nutrition Assistance Program (NJ SNAP). June 2025. P. 6.

[34] New Jersey Dep’t of Human Services, Statement from Human Services Commissioner Sarah Adelman on Impact of Medicaid and SNAP Cuts on NJ. July 3, 2025.

[35] New Jersey Dep’t of Human Services, Statement from Human Services Commissioner Sarah Adelman on Impact of Medicaid and SNAP Cuts on NJ. July 3, 2025.

[36] Stainton, L. NJ Spotlight News. Fears of Devastation Across NJ Health, Scientific Research if Trump Cuts Proceed. Feb. 12, 2025.

[37] Biryukov, N. New Jersey Monitor. Trump administration delays massive Hudson River rail project. Oct. 1, 2025.

[38] Chen, P. New Jersey Policy Perspective. Fair and Square: Changing New Jersey’s Tax Code to Promote Equity and Fiscal Responsibility. Nov. 14, 2024.

[39] Austin, S. and Davis, C. Institute on Taxation and Economic Policy. The Wealth Proceeds Tax: A Simple Way for States to Tax the Wealthy. Oct. 30, 2025.

NJPP Statement on Final Day of Legislative Action

Posted on by NJPP Staff

On January 12, the New Jersey Legislature voted on more than 100 bills to close out the 2024-25 legislative session. Several bills will help protect New Jersey residents, while others weaken fiscal accountability and create challenges for the next legislature and administration.

In response to these bills, NJPP issues the following statements:

On paid family leave job protection expansion (A3451/S2950):

“No New Jersey worker should ever have to choose between bonding with their new child and keeping their job,” said NJPP Senior Policy Analyst Peter Chen. “This bill protects hundreds of thousands of workers from being fired or demoted for taking family leave. The next legislature should finish the job by closing remaining loopholes and extending these protections to everyone.”

On higher rates on heavy users of electricity (A5462/S4307):

“As New Jerseyans are already dealing with sky-high utility bills, this bill makes sure energy-intensive businesses, like data centers, pay for the costs they’re passing on to families. ” said Alex Ambrose, Policy Analyst at New Jersey Policy Perspective. “With PJM adding more data centers to the grid, New Jersey needs to protect residents from footing the bill. Governor Murphy must sign this to hold heavy electricity users accountable and keep costs down for families.”

On bills loosening and expanding corporate subsidy programs (A6298/S5025 and A6306/S5031):

“The state is staring down a deficit of more than $1 billion and working-class families are struggling to afford basics,” said Peter Chen, New Jersey Policy Perspective Senior Policy Analyst. “Now is not the time for more giveaways to politically connected corporations. A $300 million tax credit to the Prudential Center and loosened accountability rules chip away at the reformed 2020 corporate subsidy law. Governor Murphy should reject these bills and protect his legacy of reining in billionaire giveaways.”

New Jersey Should Reject Unjustified Giveaways to Sports Teams and Big Business

Posted on by Peter Chen

The continued expansion of corporate tax credits to induce economic development has yet to fully deliver on its promise. And yet, this bill proposes to send good money after bad, authorizing billions of state tax dollars to go towards private businesses and billionaires.

To be clear, the word “tax credit” is simply another word for subsidy – state tax dollars will go to pay for the development of real estate projects that benefit primarily private corporations and individuals, with the goal of creating long-term economic growth. Independent economic analysis from right, left and center have routinely cast doubt on the effectiveness of these credits.

Expanding the overall cap on credits by $3 billion has no justification.
The bill as written would expand the maximum total value of credits to $14.3 billion from the current cap of $11.5 billion. Basic questions remain unanswered such as why this increase is needed, given that credits remain unused in many years, and why such a dramatic increase does not include any additional safeguards on expenditures. Additionally, it’s unclear how this funding would all be used in the years remaining on the initial nine-year authorization.

There is no clear need for the sports and entertainment project described in the bill.
The renovation of a sports arena in a first-class city operating for 15 years with a seating capacity of 15,000 individuals applies only to one facility – the Prudential Center in Newark. The arena itself is less than 20 years old, and its entire initial cost was $375 million. Why less than two decades later it requires more than half as much to renovate as it did to build from scratch is a mystery.

In addition, sports stadiums and arenas remain among the worst possible investments for cities and states looking to increase economic activity. In state after state, and study after study, arenas produce pennies on the dollar, while saddling communities with white elephant buildings at the mercy of billionaire sports owners.

Although the requirements in the proposed bill admirably attempt to extract community benefits, at core these projects should not be the recipient of state tax dollars, given their woeful history.

As the state faces a shaky fiscal future, now is not the time to hand out more subsidies to billionaires and big corporations.

State Tax Credits Should Benefit the State, Not Just Private Businesses

Posted on by Peter Chen

The justification for economic development tax credits is that although they do subsidize billionaire businesses and developers, they should eventually have net benefits for the state – that the economic activity generated will offset the loss in revenues. Yet what this bill proposes to do is exempt megaprojects that cost the state hundreds of millions of dollars from this analysis, solely on the basis of their location in government-restricted municipalities.

The net-benefits test in the Economic Recovery Act of 2020 was a key accountability feature. Without it, a project could move forward without justifying that it would benefit the state and its residents overall, whose tax dollars are functionally subsidizing the project. In particular, the project has to actually have a positive revenue impact, not just generalized economic activity. If state tax dollars are subsidizing for-profit corporations, the standard for returns to the state must be set high.

Eliminating this net-benefits test for any project undermines the basic function of the EDA to evaluate projects for their benefit to the state. If these projects are indeed so transformational and critical, it should be easy to demonstrate their economic benefits to the state. If they cannot meet that standard, then they should not qualify for tax subsidies.

One final note: the upcoming budget already anticipates a roughly $1.5 billion structural deficit, with increasing costs and uncertain revenues. If anything, this should be a time for the state to be tightening accountability to ensure that these projects truly benefit the state’s budget, not loosening the purse strings simply because certain developers have not met current requirements.

At the very least, this committee should vote to hold this bill and await the budget projections for FY2027, before potentially losing more revenue to projects with limited fiscal benefit.

For The Many NJ: 40+ Organizations Calls on New Jersey Leaders to Make Super Millionaires and Corporations Pay Fair Share

Posted on by NJPP Staff

The For The Many coalition, representing more than 40 unions, community organizations, and advocacy groups across New Jersey, today delivered a letter to Governor Murphy and legislative leaders demanding immediate action to raise revenue from the state’s wealthiest households and largest corporations.

The letter comes as Congress passes massive tax breaks for millionaires, billionaires, and corporations while cutting healthcare, food assistance, and other critical services that New Jersey families depend on. These federal cuts threaten to strip billions in healthcare funding from the state, leaving at least 800,000 residents with more expensive coverage and reduced benefits.

“New Jersey families are already struggling with skyrocketing housing costs, unreliable transit, and rising prices for groceries and utilities,” said Eric Benson, Coalition Manager, For the Many. “The wealthy and well-connected got the biggest handouts from Washington. Now it’s time for them to pay their fair share so we can protect the healthcare, housing, and services our communities need.”

The coalition is calling on state leaders to pass two key reforms during the lame duck session:

  • Tax Super Millionaires: Create new tax brackets for those earning over $2 million, $5 million, and $10 million annually.
  • Hold Corporations Accountable: Require large multinational corporations to report profits from overseas subsidiaries and end offshore profit-shifting that drains over $1 billion from the state budget.

Together, these policies would generate the resources needed to counteract harmful federal cuts and invest in healthcare, housing, education, transit, and affordability.

“Families are struggling with skyrocketing costs and a tsunami of federal cuts to essential programs,” said Maura Collinsgru, Director of Policy & Advocacy for New Jersey Citizen Action. “Every delay means higher costs for families, deeper holes in the state budget, and more families being pushed to the brink. Our coalition stands ready to work with New Jersey’s elected officials to pass these critical reforms and ensure we have the revenue needed to invest in programs New Jersey families are counting on.”

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For the Many is a statewide coalition of more than 30 organizations committed to fixing New Jersey’s upside-down tax code and ensuring the state budget works for everyone — not just the wealthy few. Our members include labor unions, grassroots community groups, immigrant justice advocates, environmental leaders, anti-poverty organizations, and policy experts from across the state. Learn more at peoplesbudgetnj.org.

State Lawmakers Should Protect Residents from Federal Cuts to Vital Services

Posted on by Alex Ambrose

TO: New Jersey State Senate and Assembly
FROM: New Jersey Policy Perspective
DATE: August 7, 2025
SUBJECT: Federal Threats to State Affordability, Essential Services, and Budget Integrity

The recent signing of budget reconciliation bill H.R. 1, also known as the “One Big Beautiful Bill Act” (OBBBA) will have far-reaching and devastating consequences for New Jersey. Combined with other federal rules that are being rapidly rewritten — such as the Marketplace Program Integrity Final Rule  — the new law destroys federal funding for critical programs on which the state depends to support residents building their futures and raising their families in the Garden State.

Coming cuts to Medicaid, restrictions on access to affordable health coverage through the GetCovered NJ marketplace, cuts to the Supplemental Nutrition Assistance Program (SNAP), increased costs for student loan borrowers, cuts to climate programs, and increased funding for immigrant detention will harm Garden State families and threaten affordability and the state budget for years to come. Some changes will take effect immediately, while others will create destructive gaps in future state budgets.

Now is the time for lawmakers to protect New Jersey by strengthening our state reserves, identifying new funding sources, and taking proactive protective steps to maintain essential services for residents. Governor Murphy has ordered departments to study the effects of these actions. Some departments warned during this year’s state budget discussions about the coming budget holes and loss of coverage. Lawmakers must recognize these urgent deadlines and act quickly and decisively to prevent the harm to New Jersey families.

Below is a timeline of the most important dates for impending changes that will result in loss of health care coverage, worsened food insecurity, reduced affordability, and increased threats to immigrant communities.

Sincerely,

The New Jersey Policy Perspective Research Team

Brittany Holom-Trundy, Research Director
Alex Ambrose, Climate and Transportation Policy Analyst
Peter Chen, Tax and Budget Senior Policy Analyst
Marleina Ubel, Criminal Legal Systems and Immigrant Rights Senior Policy Analyst

 

Sleepwalking into Catastrophe

Posted on by Alex Ambrose

Throughout the budget process — from Governor Murphy's proposal to the public hearings to the revenue projections — one major threat loomed over state lawmakers: the federal reconciliation bill’s cuts to Medicaid, food assistance, and other critical programs. Given their public statements opposing these cuts, the state budget should have been an opportunity to build defenses against these cuts, begin raising revenues from wealthy individuals and corporations, and avoid short-term giveaways.

Instead, the budget process went on autopilot. Leaders cut back revenue increases and dipped deeper into the state's cash reserves, as though there would be no federal cuts at all. As has happened in prior years, new expansions in corporate tax credits sailed through committee hearings while the expensive Stay NJ senior homeowner subsidy was preserved without even modest changes to reduce its overall cost to the state. The budget also continued the unfortunate tradition of using dedicated funds to patch one-year budget gaps, including an expanded raid of the Clean Energy Fund to fund both New Jersey Transit’s general operating expenses and the General Fund.

This budget could and should have been a moment of courage — a governor’s final budget, a legislature that has stated its desire to protect the state’s residents from devastating cuts. But instead, the state’s leaders delayed any preparation for federal cuts until after they had already become law. The difficult decisions will not be easier later.

Below is a short summary of NJPP’s budget priorities and their final status in the Appropriations Act.

NJPP FY26 Budget Priority

Was it included in the Governor’s Budget?

Protect the surplus and close the deficit  Partially Included. The projected annual budget shortfall has been reduced from $2.1 billion in the FY 2025 budget bill to $1.5 billion through some tax increases and budget cuts. The budget bill retains cash reserves of nearly $6.8 billion, but still cuts deeper into the reserves to pay basic expenses.
Fully fund pensions
and schools		  Yes. The governor and legislature continued the state’s commitment to fully funding pensions and the K-12 school funding formula.
Raise revenues to balance
the budget		  Partially Included. The final state budget does include increases in revenue, including the increase in fees on property sales over $2 million and increased taxes on online gambling. However, these increases raise less money than the governor’s original proposals, leading to the budget drawing more heavily on cash reserves.
Maintain StayNJ’s guardrails, specifically the original spending rules that require a healthy budget surplus  No. StayNJ, an expensive subsidy program that disproportionately benefits wealthy senior homeowners, requires a 12 percent surplus target before payments can go out. This budget continues to fund StayNJ and assumes payments will go out in 2026, even though the surplus is now well below 12 percent.
Maintain funding for services for immigrants  Yes. Thankfully, the proposal preserves funding levels for programs such as Cover All Kids, which provides health insurance for children regardless of immigration status, and legal services for immigrant adults and children. The budget also doubles funding for the Office of New Americans, which connects immigrants to services for which they or their families may be eligible.
Expand and improve
tax credits for working
families		  No. Unfortunately, the final budget included no expansion of the Child Tax Credit or Earned Income Tax Credit to help working families afford the increasing cost of living in the state.
Increase benefits in WorkFirst NJ to reduce poverty  No. Similarly, there was no expansion of the benefit amount for WorkFirst NJ, which provides cash assistance to low-income households.
Expand affordable health insurance options  Partially Included. As noted above, the budget continued to fund Cover All Kids, dedicating $165 million to the program to keep pace with enrollment. However, there were no other proposals to expand access or eligibility to state-funded health insurance programs.
Keep the Corporate Transit
Fee funding transit		  Yes. Corporate Transit Fee funds were directed only to New Jersey Transit and not to the general fund or footing the bill for other programs.
Use the Clean Energy Fund
only for clean energy projects		  No. In fact, lawmakers expanded the raids on the Clean Energy Fund to over $190m to be used for basic New Jersey Transit operations and to the General Fund.
End predatory prison communication fees  No. The budget did not include any funding to reduce or eliminate the cost of prison communication fees, leaving families to bear the $15 million burden of communicating with their incarcerated loved ones.

All citations to the Appropriations Act (A-5800/S-2026) and Scoresheet unless otherwise indicated.

To learn more about policy solutions that NJPP recommends to build a more equitable state, read Blueprint for a Strong and Resilient New Jersey.

 

“Beautiful” Bill Devastates NJ Families While Delivering Massive Tax Breaks to the Wealthy

Posted on by Nicole Rodriguez

Today, the U.S. House of Representatives passed the final version of President Trump’s “One Big Beautiful Bill” following U.S. Senate approval on June 30. The legislation extends the 2017 tax cuts while adding new ones. It also cuts nearly $1 trillion from Medicaid, with more reductions to food assistance for the poor and other government aid.

In response to the bill, NJPP released the following statement.

“This harmful and irresponsible bill threatens New Jersey families by cutting funding for essential programs like health care, food assistance, and housing — programs that hundreds of thousands of residents rely on to stay healthy, fed, and housed.

“The health care cuts alone with devastate New Jersey families. Hundreds of thousands of New Jerseyans will either lose their health insurance or face much higher coverage costs. Around 227,000 New Jerseyans will be kicked off Medicaid as they face overwhelming red tape in getting and keeping their coverage. Another 454,000 residents will pay higher premiums through GetCovered NJ. These cuts will hurt working families, older adults, and people with disabilities the most.

“Food programs will also take a major hit. Over 800,000 residents receive food assistance through SNAP, and about 712,000 children rely on the national school lunch program. Reducing this support will increase food insecurity, worsen health outcomes, and put more pressure on schools, food banks, and community organizations.

“Housing costs are already crushing Garden State families. With 51 percent of New Jersey renters spending over 30 percent of their income on rent — already a heavy burden — cutting federal housing assistance will push more people into a housing crisis, especially in a high-cost state like ours.

“This is not just about doing what’s right — it’s about real consequences. Every dollar cut by Congress creates a deeper hole in New Jersey’s already woefully weak safety net and a bigger bill for the state to cover. The timing couldn’t be worse: New Jersey lawmakers just finalized the Fiscal Year 2026 budget and did not plan for these huge federal cuts.

“Meanwhile, the bill delivers massive tax breaks to the wealthy. The top 5 percent of earners in New Jersey — those making more than $471,200 a year — will receive 33 percent of all tax cuts, totaling more than $5.1 billion. But the bottom 20 percent of earners will receive just 1 percent, or about $167 million. This is a deeply unfair approach that benefits the rich while shifting risks and costs onto everyone else.

“New Jersey can’t afford to follow Washington’s lead. Lawmakers must protect vital services — and raise revenue fairly to protect the people hit hardest.”

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Coalition Slams Trump’s “Beautiful” Attack on Working Families

Posted on by NJPP Staff

“There’s nothing beautiful about ripping health care away from millions while handing billionaires a massive tax break.

“Trump’s so-called One Big Beautiful Bill is a direct attack on working families, seniors, immigrants, and communities of color. It’s nothing but a massive giveaway to the ultra-rich, and New Jersey deserves better.

“This bill kills. It bankrupts. It robs our future to enrich the few.

“While billionaires get nearly $300,000 in tax cuts, working families get $160. While the wealthy celebrate, 16 million Americans lose health coverage. While the President’s friends cash in, children lose school meals and families lose their doctors.

“This isn’t reform — it’s robbery.

“Three New Jersey Representatives abandoned the Jersey values that say we look out for each other. Instead Reps Tom Kean Jr, Chris Smith, and Jeff Van Drew catered to wealthy donors and directives from the White House over the needs of their constituents.”

# # #

For The Many NJ is a statewide coalition of more than 40 organizations working to expand funding for essential services and improve budget practices to meet current and future needs, especially for communities that have been historically left behind.

2026 Budget Leaves NJ Exposed to Billions in Federal Cuts

Posted on by Nicole Rodriguez

Governor Murphy signed the Fiscal Year 2026 Appropriations Act today, approving funding levels for the next twelve months, but the state still faces a financial cliff. The approved budget includes modest revenue increases, though not enough to cover the full cost of the state’s spending. This leaves the state with a nearly $1.5 billion gap that must be filled from its cash reserves, which have dwindled to $6.7 billion. Cash reserves that once provided a safety net now cover barely one month of operations.

Making matters worse, the state faces additional funding threats from federal actions. With New Jersey receiving nearly $30.8 billion in federal funds in fiscal year 2024, Congress’s expected vote on massive cuts to Medicaid and food assistance programs could devastate both the state’s finances and the hundreds of thousands of residents who depend on these services.

In response, NJPP issues the following statement.

Nicole Rodriguez, President, NJPP:

“Over the past seven years, Governor Murphy has taken great steps to put the state back on strong financial footing. He achieved full funding of the school funding formula and the state’s pension payments, restored the state’s credit ratings, and refilled the state’s cash reserves to protect against unexpected economic downturns. But this legacy is now at risk, with potentially catastrophic federal cuts to Medicaid and food assistance being approved by Congress and a state budget that still does not raise enough revenue to cover its expenses.

“The Governor and the legislature have worked to ensure that the budget reflects new revenue sources focused on the wealthy and powerful. With the addition of critical revenue sources such as the millionaire’s tax on households with income over $1 million, the corporate transit fee on big businesses, and now an expanded realty transfer fee on property sales over $2 million — each an NJPP priority — the state’s leaders have raised revenues to help fund the critical programs that make New Jersey a great place to raise a family or start a business.

“Unfortunately, more needs to be done to protect the state from the economic challenges ahead. With New Jersey receiving nearly $30.8 billion in the last fiscal year, cuts from Washington will create a devastating double impact — harming the state’s finances while directly hurting New Jersey residents by kicking them off health insurance or denying them access to food. New Jersey can and should show the way forward for the country by ensuring that its residents are protected from these harmful federal actions. But to do so, the state will need more revenue and bold action to ensure that the state’s dollars go to help those who need it most. Simply transferring money from other accounts for one-year fixes does not provide the base for long-term investments that the state needs.

“This budget’s legacy depends on what happens in Washington. It represents a missed opportunity for the state to take bold, decisive action to protect its residents by raising revenue ahead of time to limit the damage of federal cuts. New Jersey’s leaders must act quickly to protect residents from the financial storm ahead.”

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