New Jersey has enacted its Fiscal Year 2026 budget, with the Legislature passing a $58.78 billion spending plan ahead of the July 1 constitutional deadline. The final budget reflects an increase of approximately $727 million over Governor Phil Murphy’s original proposal in February. The budget process involved negotiations across a range of priorities, ultimately producing a plan that maintains a surplus of more than $6 billion, provides full pension payments, and allocates investments across healthcare, education, and transportation.
Below is an overview of the budget’s key provisions.
Taxation, Business Policy, and Economic Development
The FY 2026 budget includes several new or increased taxes aimed at high-value sectors while allocating money to property tax relief programs. The ANCHOR (Affordable New Jersey Communities for Homeowners and Renters) program will continue paying eligible homeowners up to $1,500 and renters $450, plus a $250 bonus for both senior renters and homeowners. Similarly, StayNJ seeks to cut property tax bills in half for eligible seniors. The new budget dedicates $280 million, in addition to the $320 million from the previous two fiscal years, to launch the program. Realty transfer fees will double from 1% to 2% on homes sold for between $2 million and $2.5 million, and they will rise to 2.5% on homes sold for between $2.5 million and $3 million. Tax rates on Internet gaming and sports betting—originally proposed at 25%—were settled at 19.75%. Additional taxes were implemented on cigarettes and vaping products.
Notably, several business tax proposals that generated concern among industry groups were removed from the final package. This includes the withdrawal of the so-called buck-a-truck excise fee and a range of proposed levies on recreational services and products. At the same time, the budget restores or increases funding for several pro-business initiatives. Funding is preserved for manufacturing programs and small-business grant initiatives, while the Business Marketing and Events Initiative received renewed investment to position New Jersey as an attractive destination for commerce and tourism.
Education and Higher Learning
The budget fully funds the school aid formula and provides record high funding for K-12 schools. Higher education institutions also see meaningful support with a budget that restores outcomes-based allocation amounts to four-year public institutions. Among the key items are enhanced Summer Tuition Aid Grants, funding for a loan redemption program supporting air traffic controllers, and grants to promote unmanned aircraft systems training. Additional investments are directed toward nonpublic school services, including auxiliary services and nursing aid.
Transportation and Energy
The budget also includes public transit and clean energy priorities. NJ Transit will receive an additional $70 million from the state’s Clean Energy Fund, bringing the total redirected allocation to more than $140 million. These funds will be used to offset utility costs and support initiatives such as bus electrification. The budget also increases appropriations to the state’s Plug-in Electric Vehicle Incentive Fund, also drawn from the Clean Energy Fund, with $25 million dedicated to promoting electric vehicle adoption.
Overview
The enacted budget signals the continuation of several fiscal priorities that have defined recent years: maintaining a sizable surplus, prioritizing full pension payments, and increasing investment in targeted sectors. However, structural budget pressures remain a concern for future fiscal years, especially as federal relief funds expire and one-time revenues decline.
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