The basics:
- A Garden State Initiative report finds New Jersey budget earmarks totaled $2.1 billion between FY2024 and FY2026.
- The number of earmark recipients rose 450% in two years, from 101 to 462 entities.
- More than $860 million in FY2026 discretionary spending not requested by the governor
- Researchers call for greater transparency, competitive bidding and redirecting funds toward tax relief or debt reduction.
A new report from the Garden State Initiative argues that legislative earmarks added to New Jersey budget are growing rapidly, increasing costs for residents while reducing transparency in the state’s spending process.
Thad Calabrese, a finance professor at New York University, authored by the report released March 9 – just ahead of Gov. Mikie Sherrill’s first Budget Address. It finds that discretionary spending inserted into the state budget totals about $2.1 billion between fiscal years 2024 and 2026, including $860 million in Fiscal Year 2026 alone. The paper notes the funding requests did not come from the governor.
Last-minute “pork” or “Christmas tree” items added to the budget draw much scrutiny – especially as they come in the 11tn hour of the process and behind closed doors.
A better use of funds
The analysis points to a sharp rise in the number of recipients of these earmarks. That figure has grown 450% in two years, from 101 entities in FY 2024 to 462 in FY2026.
More than a quarter of the funding in 2026 went to private or nonprofit organizations rather than public agencies. According to the report, the spending effectively costs the average New Jersey household about $240 per year.
The report also highlights more than $118 million in supplemental appropriations approved by the Legislature and signed by Gov. Phil Murphy in January before he left office. The moves support nearly 20 projects that did not make it into the original FY 2026 budget. They largely distribute through state aid or grants-in-aid to third parties.
Researchers argue the funds could instead go toward broader purposes, such as tax relief or paying down state debt.
The report estimates the spending could otherwise fund a 4% across-the-board income tax cut. It could also eliminate income taxes for those earning $50,000 or less. Or even reduce a portion of the state’s bonded debt.
“There is a lot of talk about affordability these days, which is more pronounced with a $3 billion budget deficit this year,” said Audrey Lane, president, Garden State Initiative. “One place for the Governor to look is to hold the line on last-minute discretionary spending. Since 2024, the Legislature has added … politically connected spending without any standard review process, that could otherwise pay down our debt, provide significant tax relief for struggling families and businesses.”
Reform recommendations
The report calls for three key reforms:
- Eliminating non-competitive legislative add-ons
- Redirecting earmark funding toward tax relief or debt reduction
- Requiring greater transparency and public bidding for grants to third-party organizations
“New Jersey is at a fiscal crossroads,” Calabrese concluded. “While the state faces a structural deficit and a gaping pension debt, the Legislature has chosen to triple the number of recipients of discretionary spending in just two years.
“This behavior is a violation of the spirit of New Jersey’s constitutional balanced-budget requirement. The state can no longer afford to treat the budget without complete transparency and fiscal responsibility.”
New Jersey is at a fiscal crossroads. While the state faces a structural deficit and a gaping pension debt, the Legislature has chosen to triple the number of recipients of discretionary spending in just two years.
– Thad Calabrese, author, ‘Opportunity Lost’
“What this report suggests is that the Governor and the Legislature can reform this earmark process to increase transparency of this spending well in advance of the budget deadlines to ensure it meets a public need in an objective way,” said Lane. “I look forward to hearing Governor Sherrill’s budget address tomorrow—her acknowledgment of the structural deficit is welcomed and is the first step toward meaningful budget reform.”
The full report is available here.
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