New Jersey

New Jersey

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FY2026 (enacted)
FY2026 (proposed)
FY2025 (enacted)
FY2024 (enacted)
FY2023 (enacted)
FY2022 (enacted)
FY2021 (enacted)

Enacted Budget – Fiscal Year 2026

On June 30, New Jersey Governor Phil Murphy signed the state’s fiscal 2026 budget, with line item vetoes. The enacted budget provides for $58.78 billion in total state fund appropriations and $31.01 billion in federal fund appropriations. The budget is based on total resources for all state funds of $65.8 billion, including a beginning balance of $8.3 billion, general fund revenue of $33.7 billion, property tax relief fund revenue of $22.7 billion, Casino Revenue Fund resources of $1.03 billion (including a beginning balance of $147 million), Casino Control Fund revenue of $80 million, and Gubernatorial Elections Fund revenue of $0.7 million. The budget projects an undesignated ending balance (or surplus) of $6.7 billion. 

The budget prioritizes fiscal responsibility, affordability and economic security, support for the next generation, and the state’s economic future. The budget includes several tax policy changes including increases for the highest tier of realty transfer fees, sports betting, and cigarettes and vaping, while also creating a new exemption for small business investment and changes to the Angel Investor Tax Credit. The budget invests Corporate Transit Fee revenue into supporting and modernizing public transit, as well as makes investments in road and bridge projects and NJ TRANSIT capital projects. To support affordability, the budget continues to provide direct property tax relief through programs like ANCHOR and Senior Freeze, while also implementing the Stay NJ program to help senior citizens remain in New Jersey. The budget also supports first-time and first-generation homeowners with down payment assistance, provides funds to ensure state employee access to paid parental leave, expands Family Connects NJ to provide free home visits to new parents, and provides funding for women’s health care programs on top of what is covered by state-sponsored insurance programs. For education, the budget fully funds the state’s school funding formula as well as eases volatility in school funding by limiting year-over-year changes in state funding for any school district, expands preschool programs into new districts to move towards free, universal preschool, funds incentive grants to school districts interested in transitioning to phone-free environments, and provides new grant funds to help fund high-impact tutoring. The budget also provides significant operating and capital support for higher education institutions, as well as sets aside funds from the Debt Defeasance and Prevention Fund to put towards constructing a new correctional facility. For the fifth consecutive year, the budget provides a full payment to the pension systems. 

Enacted Budget Information
Fiscal Year 2026 Enacted Budget

Budget at a Glance

Veto Message

Veto Summary 

Governor's Press Release 

Revenue Certification

Proposed Budget - Fiscal Year 2026

On February 25, New Jersey Governor Phil Murphy presented a fiscal 2026 budget. The proposal calls for total budgeted expenditures in fiscal 2026 of $58.1 billion, a 0.1 percent decrease compared to adjusted appropriations for fiscal 2025. Of the total, 41.3 percent will be distributed as State Aid to school districts, community colleges, municipalities and cities and 32.9 percent will be used for direct services (known as “Grants-In-Aid”) such as health care coverage for low-income residents and social services. General Fund and Property Tax Relief Fund appropriations make up most of the budget, at a combined $57.0 billion (a 0.8 percent decrease compared to fiscal 2025), with general fund spending of $34.7 billion and Property Tax Relief Fund spending of $22.3 billion. Additional appropriations come out of casino-related funds totaling roughly $1.07 billion and the Gubernatorial Elections Fund at $25 million. The budget is based on estimated total state revenues of $56.8 billion, a 3.5 percent increase compared to fiscal 2025 revised estimates. The fiscal 2026 budget projects a general fund surplus – defined as the undesignated ending balance – of $6.3 billion. In addition to the spending proposed in the governor’s budget, the state estimates it will spend $38.5 billion from funds not budgeted, including $27.9 billion in federal revenues, $3.2 billion in state transportation funds, and the remaining from other dedicated and revolving funds. Total state spending including budgeted and non-budgeted expenditures in fiscal 2026 is estimated at $96.6 billion, a 2.5 percent increase from estimated fiscal 2025 expenditures.

Proposed Budget Highlights 

The governor’s budget builds on historic investments to expand affordability and strengthen economic security, support the next generation, maintain fiscal responsibility, and build a “stronger and fairer” future. To achieve these goals, the budget proposes additional tax relief, lowering costs in health care and housing, investments in preschool and K-12 education, a range of economic development initiatives, and expanding apprenticeships and other vocational programs, while also taking steps to strengthen the state’s fiscal position, including spending reductions and tax policy changes to bring revenues more in line with expenditures. Highlights of the budget include:

Affordability and Economic Security

• Implements the Stay NJ program to reduce property taxes for more than 432,000 senior homeowners
• Introduces new sales tax exemptions for baby items such as cribs and strollers
• Provides funding for state employees to take parental leave with full pay
• Expands Family Connects NJ, a free home visitation program available to families with newborns
• Continues funding for the Down Payment Assistance Program
• Calls for legislation to codify the Office of Health Care Affordability and Transparency and permanently eliminate fees for consumer appeals against insurance companies

Support for the Next Generation

• Increases school formula aid and provides record-high school funding
• Caps losses in major school aid categories (equalization, special education, security, and transportation) at 3 percent to ensure no district sees a steep year-over-year decline in state aid
• Includes legislation to require every school district to provide full-day kindergarten
• Provides new grant funding to districts for high-impact tutoring and to incentivize districts to transition to a phone-free learning environment
• Proposes additional funding for preschool to continue movement towards free universal preschool 
• Launches a new OB/GYN incentive program to attract reproductive health care providers to the state
• Provides largest ever investment in state history to protect reproductive rights
• Invests in mental health resources and services for students

Fiscal Responsibility

• Makes fifth consecutive full payment to the state pension system
• Proposes a robust surplus of $6.3 billion or 10.9 percent of state appropriations
• Largely caps new discretionary spending and incorporates appropriation nearly $2 billion in appropriation reductions
• Supports NJ TRANSIT with dedicated funding from the Corporate Transit Fee, approved last year
• Uses funds from the Debt Defeasance and Prevention Fund to construct a new female correctional facility
• Reforms technical parole violations, which will save taxpayers money
• Recommends codification of the Office of Innovation
• Proposes a range of tax policy changes to generate additional revenue, including but not limited to, expansion of current sales and use tax base, increases for the highest tier of assestment on real property greater than $1 million, and tax increases on sports betting, alcohol, adult-use marijuana, and cigarettes

Economic Future 

• Continues funding for Strategic Innovation Centers (SICs) to attract innovative businesses and workers to the state
• Recommends legislation to align state tax code with federal tax treatment for Qualified Small Business Stock and reforms the Angel Investor Tax Credit
• Announces intention to create a new tax credit to incentivize global companies to manufacture next-generation products in New Jersey 
• Doubles funding for the Office of New Americans to support recent legal immigrants as they settle in
• Includes funding for critical highway and bridge projects, as well as NJ TRANSIT capital projects
• Includes additional funding from the Clean Energy Fund to enhance the affordability of electric vehicles 

Proposed Budget Information

Fiscal Year 2026 Detailed Budget

Fiscal Year 2026 Proposed Budget

Budget at a Glance

Governor’s Press Release