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Proposal Includes $1.7 Billion Structural Deficit

On March 10, Governor Mikie Sherrill delivered her budget proposal for New Jersey’s 2027 fiscal year, which begins July 1. The proposed $60.7 billion budget, which is 1.6% higher ($980 million) than the state’s current budget, includes the following: 

• $2 billion in cuts
• More than $7 billion for a full pension payment
• A $5.4 billion surplus (down from $7.2 billion in the current year’s budget)
• More than $4 billion in direct property tax relief:
• The income threshold for Stay NJ would be reduced from $500,000 to $250,000, and the maximum benefit would be capped at $4,000.
• No change in ANCHOR benefit amounts
• A $1 million cap on the corporate tax deduction for net operating losses (NOLs) and prior net operating losses (PNOLs)
• Amendments to the alternative business calculation:
• Reduction in deduction for businesses with gross income between $500,000 and $1 million to 25%
• Deduction eliminated for businesses with gross income above $1 million
• A new per-employee fee on employers with more than 50 employees enrolled in NJ FamilyCare (New Jersey’s Medicaid)
• $12.4 billion for K-12 schools and $1.4 billion for pre-K and
• More than $1 billion for NJ Transit, including $766 million from the corporate transit fee

There is a $1.7 billion structural budget deficit.

The Governor also indicated that there would be reductions in filing fees for corporations and nonprofits; funding for additional employees for the New Jersey Business Action Center; continued funding for the Main Street Recovery Fund; support for additional staffing at NJDEP to expedite permitting; and creation of a permitting dashboard.

The budget has to be approved by the Assembly and the Senate and signed into law by June 30.