If you missed Governor Mikie Sherrill’s budget address yesterday in Trenton, don’t worry, we’ve got you covered. On March 10, 2026, New Jersey’s newest governor stood up in the Assembly Chamber and laid out a $60.7 billion spending plan for Fiscal Year 2027.
That’s a record for the state. But before you panic (or cheer), let’s break down what’s actually in it and what it means for everyday New Jerseyans.
The budget is titled “Rising to the Mission: A More Affordable & Accountable New Jersey”, and Sherrill was upfront that it involves some tough calls. As she put it: “The hard truth is we’re going to have to make some tough choices to deliver for people long-term. To get to affordability, we have to start with responsibility.”
A Record Budget with a Serious Deficit Problem
The $60.7 billion proposal is the largest budget in New Jersey history. But the hardest part to imagine is that it spends roughly $1.7 billion more than the state expects to bring in.
That’s not ideal, but Sherrill’s team argues the alternative is worse: do nothing, and the state’s surplus gets wiped out in under two years.
To address that, the budget includes nearly $2 billion in spending cuts and targets about $700 million in new revenue – not from raising your taxes, but by closing corporate loopholes. The goal is to shrink what’s called the “structural deficit” and aim for a balanced budget by 2028.
The state would still maintain a $5.4 billion surplus (down from $7.2 billion), but Sherrill is clearly trying to stop the bleeding before it gets worse.
A key point here: this budget is only 1.6% above last year’s adjusted appropriation. Compare that to the previous eight budgets, which grew nearly 7% annually on average. That’s a meaningful shift in tone.
Property Taxes: The Biggest Relief Package in State History
If there’s one headline number here, it’s this: nearly $4.2 billion in property tax relief. That’s the largest in state history, and it’s a big deal given that NJ property taxes are famously brutal.
Here’s how it breaks down:
- $2.3 billion for the ANCHOR program — the main relief vehicle for homeowners and renters.
- $350 million for Senior Freeze — protecting seniors from rising tax bills.
- Nearly $700 million for Stay NJ — but with new eligibility rules.
That last one comes with a catch. Stay NJ, a program designed to help seniors stay in New Jersey, is getting reformed. Under the new proposal, only households earning $250,000 or less would qualify, and the maximum benefit would be capped at $4,000.
Sherrill framed it simply: “If you make $250,000 or less, your tax relief is in this budget.”
Senior renters also get a specific win: they’ll keep the $250 bonus under ANCHOR that was set to expire after this fiscal year.
Record Investments Across the Board For Our Kids
The budget proposes a record $12.4 billion for K-12 public schools which is a $370 million increase over last year. And there’s also a record $1.4 billion for Preschool Education Aid.
These aren’t just talking points; they represent the highest school investment figures in New Jersey history.
On the tutoring front, the budget doubles funding for high-impact tutoring to $15 million. That expansion would reach nearly 100 additional districts and 13,500 more students which is a direct response to pandemic-era learning gaps.
Sherrill also took aim at social media’s impact on kids. With New Jersey’s first cell phone-free school year coming up this fall, the budget sets aside $125,000 for a new Office of Youth Online Mental Health Safety and Awareness, plus $500,000 for a Social Media Research Center at a New Jersey university. Small dollar amounts, but meaningful signals.
Pensions: Finally Getting Paid
This one’s a bit wonky but important. New Jersey has a long and embarrassing history of skipping or underfunding its pension payments.
Sherrill’s budget includes a full $7.3 billion pension contribution, making this the sixth consecutive full payment to the state pension system. It is notably the first time in decades that a governor has fully funded the pension in the first year of an administration.
To put it in perspective: this single contribution is more than all combined pension contributions made by Governors Whitman, DiFrancesco, McGreevey, Codey, and Corzine – combined.
NJ Transit Stays Intact
Good news for commuters: there are no cuts to NJ Transit services. The budget funds 40 new rail cars and 250 new buses, and continues support for the Gateway Tunnel project — the long-delayed effort to build a new rail tunnel under the Hudson River. If you commute into New York City, that’s one to watch.
Housing, Healthcare, and More
A few other notable items worth knowing about:
- Affordable Housing: The budget reduces transfers from the Affordable Housing Trust Fund by $70 million to make room for new construction, and increases Down Payment Assistance by $5 million, benefiting nearly 3,000 first-time homebuyers.
- Healthcare: Expect a crackdown on pharmaceutical benefit managers (PBMs) and reforms to the State Health Benefits Program. Employers will face new mandates around Medicaid coverage.
- Energy: Building on earlier executive orders to freeze utility rate hikes, the budget directs the Board of Public Utilities to find funds for Residential Energy Assistance Payments (REAP) for lower-income residents.
- Veterans: $11 million for the Bringing Veterans Home initiative, with a goal of transitioning all known homeless veterans into permanent housing this year.
What’s Getting Trimmed
No budget this size comes without pain. Along with the Stay NJ reforms, some university aid is being trimmed. Sherrill is also pausing new regulations and avoiding any costly new programs.
The revenue side leans on closing corporate tax loopholes – things like net operating loss deductions and alternative business calculation deductions, rather than adding new taxes on individuals.
Republicans were skeptical.
Assemblyman Chris DePhillips of Bergen County told reporters after the address that Sherrill “punted,” arguing she should have proposed cuts to the corporate business tax (currently 11.5%) or the sales tax (6.625%).
His message: after eight years of Phil Murphy, this felt like more of the same.
Sherrill is make meaningful investments in schools, pensions, and property tax relief while simultaneously cutting spending growth and avoiding new individual taxes.
Whether the math works out, and whether the Legislature goes along, remains to be seen. The budget now heads to the Legislature for hearings and negotiation before the June 30 deadline.
One thing is clear: Sherrill came in with a message of fiscal responsibility paired with affordability. The next few months will reveal whether Trenton can actually deliver on that.
