Gov. Phil Murphy signed the budget for fiscal year 2026 into law late Monday night, saying the $58.8 billion effort marks a “culmination” of his longstanding commitment to fiscal responsibility, affordability and opportunity.
The administration says the budget continues his efforts to make long overdue investments in addressing the needs of working New Jerseyans — from property tax relief to school funding to restoring funding for the state’s pension systems to helping rebuild infrastructure and NJ Transit.
The administration describes the fiscal year 2026 budget this way:
- Redirects over 75 percent of the total budget back into communities in the form of grants-in-aid for property tax relief, social services, higher education, as well as state aid to schools, municipalities, and counties;
- Includes an all-time high level of direct property tax relief for homeowners and renters;
- Provides the highest level of school funding in history;
- Prioritizes quality health services for women and families;
- Invests in effort to fully modernize NJ TRANSIT’s fleet;
- Makes a fifth consecutive full pension payment;
- Leaves a surplus of $6.3 billion.
Hard to argue with any of that.
“This budget exemplifies our dedication to fiscal responsibility, affordability, and opportunity for all New Jerseyans,” Murphy said. “Over nearly eight years in office, we have maintained a steadfast commitment to building a stronger and fairer New Jersey and righting our fiscal ship.
“I’m proud that this budget caps off an eight-year journey to turn our state around and delivers greater economic security and opportunity to every family. With the help of our legislative partners, we are moving New Jersey toward a brighter future for every child, student, worker, parent, and senior citizen who calls our great state home.”
And while no one objects to the high-value social ads (including $165 million for the continuation of Cover All Kids, $55.4 million for the Pharmaceutical Assistance to the Aged and Disabled and Senior Gold programs, and millions for the health needs of women and struggling families), the business community certainly feels more could have been done for them.
Let’s break down some of the items through the lens of the business community.
PENSION PAYMENT: This year’s $7.2 billion payment marks the fifth consecutive year Murphy has fully funded state pensions. In fact, the total pension contributions by the Murphy administration are on track to exceed $47 billion — nearly four times the $12.2 billion in total contributions of the previous six governors combined.
Quick take: This has been a great move by the governor. It’s a bold move that will be part of his legacy, as it certainly has helped the state’s credit rating. But, due to a generation of underfunding/neglect, the state is nowhere near meeting its obligations. There still needs to be serious reform moving forward.
The business community, of course, feels it will one day be called on to fill the gap (see NJ Transit funding).
Speaking of which …
NJ TRANSIT: The budget includes $788 million in funding from the Corporate Transit Fee dedicated to support NJ Transit and builds upon $1.358 billion in interest saved by taxpayers over the last four years by paying down debt and minimizing new debt taken on.
Quick take: Raise your hand if you think the Corporate Transit Fee will ever go away? Raise your hand if you think it’s fair that South Jersey companies pay into the fund but get almost nothing in return. (Its ask for a dedicated $15 million for transit projects was denied.) Raise your hand if you think this passes the “fair and balanced” test?
Which makes us wonder, how were small businesses treated …
BUSINESS TAXES: The governor signed three bills aimed at helping the innovation economy (he got full credit here). But the budget includes an increased tax for businesses selling their commercial property (as it did for homeowners).
Quick take: You can’t simply call this another tax on huge companies (so don’t come at us with that nebulous “fair share” line). This is an increased tax that kicks in on the sale of a property starting at just $2 million. That’s not big business. This is a tax on mom-and-pop shops that likely have been giving back to the communities in which they are located for generations. (Fair? Balanced?)
Any other taxes …
THE SO-CALLED SIN TAXES: The state is increasing taxes on cigarettes and vaping products. But it also is raising taxes on sports betting.
Quick take: No argument on cigarette/vaping taxes. To be fair, whatever is raised won’t make up for increased health care costs that the state likely will be forced to pay down the line.
But sports betting?
That tax jumped from 13% to 19.75% (An aside: why not make it an even 20%? Simply keeping it in the teens is not fooling anyone). Here’s the bigger issue. This is tax revenue that not only fell into the state’s lap (no one saw legalization coming other than Ray Lesniak), but it also is a sector that has a huge upside — one that New Jersey seemingly has a monopoly on, if not a big head start.
As it should, the state spends so much money trying to create innovative companies in new-age sectors (again, see bills passed story). So, why would state quickly tax an innovation industry that the state didn’t have to invest in to start? The appeal of New Jersey to the sports betting industry took a hit.
Taxing this sector makes as much sense as going after another major driver of the economy that somehow has fallen out of favor: E-commerce and warehousing.
Which leads us to …
BUCK A TRUCK: The state opted not to add an excise fee on warehousing, the so-called ‘Buck a Truck’ bill.
Quick take: One golden goose lives another year.
Now, where the budget invested …
INFRASTRUCTURE: There’s $1.23 billion for critical investments in state and local highway and bridge projects – and $250 million in bonding for capital grants to higher education institutions (building on the $400 million in capital grants announced in 2023).
Quick take: The only question about infrastructure investment is how many Xs of return will it bring: 2:1, 5:1, 10:1. These always are winning plays.
As is …
MONEY for COUNTY COLLEGES and MANUFACTURING: The budget provides $755.2 million in institutional support for state colleges and universities, as well as $169.1 million for county colleges and $8.6 million for independent institutions of higher education in New Jersey. It also includes help for the N.J. Manufacturing Extension Program – and a new program to benefit the manufacturing sector as a whole.
Quick take: This is another example of money well spent. It will return many multiples on the initial investment while helping to create the workforce of the future.
Which means we can all retire …
SENIOR FREEZE and NJ STAY: The budget has a $239 million allocation for the Senior Freeze program to benefit more than 235,000 taxpayers and $600 million for the Stay NJ program.
Quick take: We’re all for helping the older generation — what with us personally closing in on that door. But, gotta ask, how are we going to continue to pay for this? This budget, after all, has a $1.5 billion deficit on Day One.
Raise your hand if you think it eventually will fall on the business community.
