Before the Governor’s budget address for Fiscal Year 2026, New Jersey Policy Perspective produced a preview to evaluate whether the budget sufficiently advances economic, social, and racial justice.
With the release of the Governor’s budget in brief, the Governor’s budget met some important key benchmarks but fell short in other areas. (All citations refer to the Fiscal Year 2026 Budget in Brief unless otherwise noted.)
Below is a short summary of how the governor’s budget measured up.
NJPP FY26 Budget Priority
Was it included in the Governor’s Budget?
| Protect the surplus and close the deficit |  Yes. The projected annual budget shortfall has been reduced from $2.1 billion in the FY 2025 budget bill to $1.2 billion through some tax increases and budget cuts (BIB p. 8). The surplus remains essentially flat at $6.3 billion, although this amount is potentially too small to withstand looming federal cuts to critical programs such as Medicaid or other state-federal partnerships (BIB p. 8). |
| Fully fund pensions and schools |
Yes. The governor continued his commitment to fully funding pensions and the K-12 school funding formula (BIB pp. 10, 15-16). |
| Raise revenues to balance the budget |
 Partially Included. The governor’s budget raises roughly $1 billion in new revenues, including more than $300 million from a new real estate assessment levied on property sales over $1 million (BIB pp. 53, 58). However, the budget still draws on the surplus to balance the books. |
| Maintain StayNJ’s guardrails, specifically the original spending rules that require a healthy budget surplus |  No. StayNJ, an expensive subsidy program disproportionately benefiting wealthy senior homeowners, requires a 12 percent surplus target before payments can go out. Nonetheless, this budget continues to fund StayNJ and assumes payments will go out in 2026, even though the surplus is only 10.9 percent (BIB pp. 13, 8). |
| Maintain funding for services for immigrants | Yes. Thankfully, the proposal preserves funding levels for programs such as Cover All Kids, which provides health insurance for children regardless of immigration status, and legal services for immigrant adults and children (BIB pp. 27, 31). The proposal also doubles funding for the Office of New Americans, which connects immigrants to services for which they or their families may be eligible (BIB p. 31). |
| Expand and improve tax credits for working families |
No. Unfortunately, the governor’s budget included no expansion of the Child Tax Credit or Earned Income Tax Credit to assist working families in affording the increasing cost of living in the state. |
| Increase benefits in WorkFirst NJ to reduce poverty | No. Similarly, there was no expansion of the benefit amount for WorkFirst NJ, which provides cash assistance to low-income households. |
| Expand affordable health insurance options | Partially Included. As noted above, the budget continued to fund Cover All Kids, dedicating $165 million to the program to keep pace with enrollment. However, there were no other proposals to expand access or eligibility to state-funded health insurance programs. |
| Keep the Corporate Transit Fee funding transit |
Yes. Corporate Transit Fee funds were directed only to New Jersey Transit and not to the general fund or footing the bill for other programs (BIB p. 6). |
| Use the Clean Energy Fund only for clean energy projects |
No. The raid on the Clean Energy Fund remained similar to prior years, with $70 million going from the Clean Energy Fund to pay for basic New Jersey Transit maintenance (BIB p. 88). |
| End predatory prison communication fees | No. The budget did not include any funding to reduce or eliminate the cost of prison communication fees, leaving families to foot the $15 million bill for communicating with their loved ones who are incarcerated. |
With budget negotiations ahead, lawmakers must prioritize solutions that center the experiences of working- and middle-class New Jerseyans by strengthening economic security, protecting public services, and ensuring long-term fiscal stability. NJPP has released a full report outlining additional progressive revenue solutions that would reduce the need for budget cuts that will hurt working-class families, reduce the need to raid other funds to balance the books, and better insulate New Jersey from looming federal budget cuts.
To learn more about policy solutions that NJPP recommends to build a more equitable state, read Blueprint for a Strong and Resilient New Jersey.
