Business leaders and state legislators gathered at the New Jersey Business & Industry Association headquarters in Trenton on March 11 to watch Governor Mikie Sherrill present her $60.7 billion fiscal year 2027 budget proposal. The event drew a range of reactions, with many attendees acknowledging the difficult choices required to address a $3 billion structural deficit through nearly $2 billion in spending cuts, $700 million in new revenue measures affecting businesses, and a reduction of the state surplus from $6.7 billion to a projected $5.4 billion.
The proposed budget includes significant allocations such as $7.3 billion for fully funding the state employee pension system, $4.2 billion for property tax relief with changes to the Stay NJ program, $12.4 billion for K-12 education aid, and more than $1 billion for NJ TRANSIT.
Christopher Emigholz, chief government affairs officer at NJBIA, said Sherrill’s approach marks progress compared to previous budgets: “all the ‘pain’ does not fall on businesses, as had been seen in Gov. Phil Murphy’s past budgets.” However, Emigholz expressed concern about three tax change proposals impacting businesses, including a temporary cap on the Net Operating Loss program that could generate about $485 million per year for the state and changes to the Alternative Business Calculation that would limit eligibility to companies with gross revenues under $1 million annually. “While it may be well intentioned to better focus this tax program on smaller businesses, NJBIA is worried that the proposed threshold is too low because it excludes businesses with $1 million in gross revenue and could discourage entrepreneurial investment,” Emigholz said.
Another point of contention is a proposed employer healthcare assistance contribution targeting employers whose workers are enrolled in Medicaid through Family Care. Emigholz questioned whether it was fair for employers to be charged if employees choose Medicaid over employer-provided insurance: “It’s misguided policy because certain part-time employees choose to receive Medicaid… So, an employer will now get fined for offering healthcare that is not accepted? It’s a misaligned policy.”
Cassandra Cummings, CEO of Thomas Instrumentation Inc., criticized capping the Alternative Business Calculation at $1 million: “That excludes us, even though we are a small business… We need to hire people, but we can’t with all this overhead.” She also raised concerns about paying taxes supporting NJ TRANSIT despite her company being located where there is no transit service.
Peter Connolly, president of New Jersey Manufacturing Extension Program (NJMEP), said he appreciated Sherrill’s directness regarding fiscal issues and hoped his organization would see full funding restored after last year’s cut: “I think that Republicans are cautiously optimistic that both parties and the governor can work together… That the governor is addressing the tough issues.”
Dr. Teik Lim of New Jersey Institute of Technology praised Sherrill’s clarity during her address: “Whether you are on the winning or losing side, she provided clarity.” Lim also highlighted support for K-12 education while expressing hope for higher education funding.
Chrissy Buteas of HealthCare Institute of New Jersey welcomed efforts toward pharmacy benefit manager reform: “Common-sense PBM reform is one of the most effective and immediate ways to lower healthcare costs… We will work with the governor and Legislature to enact these proposals as quickly as possible.”
Former State Senator Steve Oroho voiced disappointment over increased spending compared to previous years and suggested cost-saving measures like implementing a Red Tape Review Commission. He also warned that lowering Stay NJ eligibility thresholds might prompt seniors to leave New Jersey.
NJBIA President & CEO Michele Siekerka concluded by recognizing efforts toward transparency and balance: “There is intent with this budget to find efficiencies and the start of necessary… spending reductions… We appreciate that budgetary challenges facing New Jersey are not exclusively being thrust upon our already beleaguered business community… Rather, there is a better balance between spending cuts and business tax changes being proposed.”
