Gov. Mikie Sherrill announced on Mar. 11 her first state spending plan as governor, proposing a record $60.7 billion budget for fiscal year 2027, which represents an increase of about 3% over the previous year’s $58.8 billion budget.
The proposed budget has drawn criticism from New Jersey Republicans, who say it continues a trend of increased spending and new taxes. Assembly Republican Budget Officer Brian Rumpf said, “New governor, same old song. We have numerous revenue enhancements, or whatever the new terminology may be. For Republicans, we call it taxes, because we call it like it is. When we’re talking about the new spending in this budget, what we’re talking about is new taxes. And there’s close to $1 billion worth in this budget.” Assembly Republican Conference Leader Christopher P. DePhillips added, “Spending continues to move in the wrong direction – up and up, just like the last eight years. This is more of the same, and nothing, apparently, has changed… Overall, this budget is not a win for the people of this state and does not improve affordability in New Jersey.”
While there are no new taxes on individuals in the proposal, businesses would see changes such as phased-out deductions and higher employer healthcare contributions—measures that some lawmakers warn could ultimately affect consumers through higher prices for goods and services.
Senate Republican Leader Anthony M. Bucco said, “The business deductions that are being eliminated – that’s in essence a tax… That revenue that is going to be raised is going to be borne – not only by the businesses – but by the consumers that those businesses sell to. Businesses don’t just eat those expenses, they pass it on in their products and services.” Senate Republican Budget Officer Declan O’Scanlon added: “Businesses pass all these taxes down onto everybody who buy their products and their services, so this is not an affordability budget yet.”
Christopher Emigholz of NJBIA commented on concerns regarding changes to business deductions: while intended to focus tax programs on smaller businesses, he warned that excluding companies with over $1 million in gross revenue could discourage investment.
Another major change involves an Employer Healthcare Assistance Contribution targeting employers with at least 50 workers enrolled in NJ FamilyCare; these employers would pay fees to help cover program costs regardless of whether they already offer health insurance coverage.
Emigholz said: “This is perhaps the most troubling part of the budget proposal for the business community… This establishes a situation where employers can be penalized even if they offer health coverage for their workers, which is already one of the largest expenses they absorb every year.” NJBIA President and CEO Michele Siekerka acknowledged some balance between spending cuts and tax changes but urged caution against hidden local expenditures: “We encourage the Sherrill administration and the Legislature to unequivocally apply discipline to avoid clandestine, add-on spending for local expenditures… These last-minute legislative earmarks violate the goals of transparency and have put New Jersey in a deeper hole than necessary,” she said.
Bucco called for greater transparency during future budgeting processes: “One thing that I think we really need to pay attention to is transparency… If this process rolls out in an open and transparent manner… that will be a major change from what we have had in the past.” O’Scanlon concluded: “I am very happy to hear that the governor is, at least rhetorically saying, that those days are over. We’ll see.”
