Yesterday, Governor Phil Murphy signed the Fiscal Year 2026 Appropriations Act into law, finalizing a $58.78 billion state budget. The legislation reflects the Murphy Administration’s ongoing focus on fiscal responsibility and aims to provide affordability and opportunity for New Jersey residents.
More than three-quarters of the budget will go toward grants-in-aid, which support property tax relief, social services, higher education, and aid to schools and local governments. The plan includes a record level of direct property tax relief for homeowners and renters, the highest school funding in state history, and continues full pension payments for public employees. Investments are also being made in health services for women and families as well as modernizing NJ TRANSIT’s fleet.
Governor Murphy highlighted the increase in the state surplus since he took office: “This budget exemplifies our dedication to fiscal responsibility, affordability, and opportunity for all New Jerseyans,” said Governor Murphy. “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.”
Lieutenant Governor Tahesha Way added: “The budget upholds our administration’s promise to make sure that New Jersey remains the best state in the nation to live, work, raise a family, and retire. Over the past seven and a half years, we have made historic strides in making our state more affordable for hardworking residents and families through expanded tax relief and major investments in affordable housing, social services, and education. This state budget is a direct result of the strong collaboration between Governor Murphy, Treasurer Muoio, and legislative leadership.”
State Treasurer Elizabeth Maher Muoio recognized staff contributions: “This budget is the culmination of a nearly eight-year effort to improve conditions for all New Jerseyans, building a fiscally stronger state that is more affordable for all. As always, this budget could not have been completed without the hard work of my staff at the Department of the Treasury and particularly the folks at the Office of Management and Budget and the Office of Revenue and Economic Analysis. I want to thank all of them for their tireless work, dedication, and exemplary professionalism over the past seven and a half years.”
Senate President Nick Scutari joined with Senate Majority Leader M. Teresa Ruiz and Senator Paul Sarlo to express support: “This is a fiscally responsible budget that puts New Jersey families first. At a time when working people are being left behind by misguided decisions in Washington, we’re making smart, strategic investments that deliver meaningful support, especially through historic property tax reductions, strong funding for public education, higher education, healthcare, transit, and a full pension payment,” they stated. “We’re grateful to Governor Murphy and our colleagues in the Legislature for coming together to enact a disciplined, forward-looking budget that safeguards essential services expands opportunity,and reinforces New Jersey’s long-term fiscal strength.”
The new budget provides its fifth consecutive full pension payment at $7.2 billion; total pension contributions under Murphy are projected at over $47 billion—almost four times what was contributed by six previous governors combined.
A $6.7 billion surplus is included—significantly larger than surpluses under prior administrations—to help ensure stability against future economic downturns.
NJ TRANSIT will receive dedicated funding from new Corporate Transit Fees totaling $788 million this year as part of efforts to modernize transportation infrastructure.
Several changes were made to tax policy within this year’s plan including increases on high-value realty transfers,sports betting,cigarettes,and vaping products.New exemptions were introduced for small business investment along with reforms related to angel investor credits.These adjustments aim at keeping revenues aligned with expenditures.
Property tax relief measures amounting close to $4.3 billion include continued funding for programs such as ANCHOR ($2.4 billion), Senior Freeze ($239 million),and Stay NJ($600 million) which launches next year.The Stay NJ program will allow eligible seniors reimbursement up to 50% on their property taxes.Maintained expansions on earned income,tax credits related childcare,and child dependent care remain priorities alongside these initiatives.
Healthcare allocations feature $165 million continuing Cover All Kids,$55.4 million supporting pharmaceutical assistance programs aiding over 149000 seniors or disabled residents,$52 million earmarked each towards reproductive health/family planning programs,and Family Connects NJ receives$35.8 million.Family leave benefits expand with$10million set aside so State employees can receive full pay during family leave following childbirth or adoption.
K-12 school funding reaches record highs at$12.1billion,a nearly$4billion rise since FY2018.A cap has been introduced ensuring no district loses more than3%in primary categories year-over-year.Another initiative offers$7.5millionfor high-impact tutoring grants while$3million incentivizes phone-free learning environments.Universal pre-school expansion continues with$1.27billionin preschool aid—a near tripling since2018,resulting in229districts benefiting statewide.
Higher education sees institutional support grow nearly50%since2018,reaching$932.9million.In addition,$250millionis allocated via bonding specifically aimed at capital grants.Additional funds target highway/bridge improvements($1.23billion)and further modernization efforts acrossNJTRANSIT($767million).
Other provisions involve investing$222milliontoward constructing anewcorrectional facility replacingEdnaMahanCorrectionalFacilityforWomen.Legislation signed alongside this act includes modifications on taxes relatedtoonlinegaming,nicotine products,and real estate transfers among others.Supplemental appropriations also address farmland preservation,recreation centers,debt reduction,and other initiatives.
An overview summary detailing key commitments from this year’s appropriations act is available online.
