Sherrill unveils $60.7B NJ budget with property tax relief

The basics:

• Sherrill proposes FY2027 New Jersey budget totaling $60.7B, up 1.6% from FY2026
• Record property tax relief of $4.2B including ANCHOR, Stay NJ, Senior Freeze
• $12.4B in school funding, $7.2B for Medicaid, $1B for NJ Transit projects
• Revenue proposals target corporate tax loopholes, small business support, employer health contributions

Gov. Mikie Sherrill unveiled her first budget as New Jersey’s 57th governor – a $60.7 billion spending plan – March 10.

“Today I am proud to present my budget proposal for New Jersey’s Fiscal Year 2027,” said Sherrill in her governor’s letter in a budget briefing. “My first budget continues my lifelong dedication to public service. It lays the foundation for a solid future. It responds to what New Jerseyans want and begins:

• To make their lives more affordable,
• To protect our kids, and
• To make our government more accountable and to change how business is done.”

The budget proposal topline is 1.6% higher than the FY2026 spending plan ($59.7 billion, including supplementals). NJBIZ reported earlier on a number of key items in the FY2027 budget, such as a record amount of school funding aid ($12.4 billion).

Key details about Sherrill’s first budget also include:

• Full pension payment of $7.3 billion
• $5.4 billion surplus (8.8% of appropriations)
• Reduces structural deficit from $3 billion to $1.6 billion
• Slimmed-down Stay NJ, capping the qualifying income threshold at $250,000 and  the maximum benefit at $4,000
• $7.2 billion in funding for New Jersey’s Medicaid program, NJ FamilyCare
• $3.6 billion in direct subsidy programs for hospitals
• $1 billion funding for NJ Transit
  • $282 million from the General Fund and $765.5 million from the corporate transit fee
• Record property tax relief of $4.2 billion
  • $2.3 billion for ANCHOR
  • Nearly $700 million for Stay NJ
  • $350 million for Senior Freeze

While the topline number is higher than the FY2026 budget, the Sherrill administration noted $2 billion in cuts. That includes to the Stay NJ program as well as the elimination of several one-time appropriations and add-on items.

During a March 9 briefing with reporters, officials noted that economic conditions in the U.S. and New Jersey moderated in 2025. Additionally, they expect little change in 2026 and 2027. However, they stressed that significant forecasting uncertainty remains because of federal factors, such as tariffs and trade; immigration; geopolitical tensions, such as in the Middle East; and more.

The administration projects FY2027 revenues to rise by $1.6 billion (up 2.7%) from FY2026.

They noted the modest baseline revenue growth is supplemented with several revenue proposals that are projected to contribute $750 million. (And are sure to get a reaction from the business community.)

Those proposals include:

• Temporarily capping Net Operating Loss deductions at $1 million for three years
  • Administration points to utilization jumping in recent years; estimated to raise $485 million in FY 2027
• Limiting the Alternative Business Calculation (ABC) deduction to small businesses
  • As the administration says it was intended when enacted in 2011; estimated to raise $120 million in FY 2027
• An Employer Healthcare Assistance Contribution to incentivize businesses that do not provide employee health benefits to offer health insurance coverage
  • Employers with 50 or more employees enrolled in NJ FamilyCare would be charged a fee to defray a portion of the costs of the program; estimated to raise about $145 million in FY2027

When asked at the briefing about the rationale behind those proposals – and whether those are technically taxes on businesses – the administration stressed that the focus was on closing corporate tax breaks and loopholes. It said having these programs benefit the small businesses and entrepreneurs they were designed for.

Stay tuned for reactions to these proposals and the overall budget.

Using all the tools in the toolbox

Sherrill noted the budget includes tough choices. She pointed to the spending cuts, the closing of those tax loopholes and asking large employers to help ensure their workers have quality health care.

“These tough choices will help us redirect funding to serve people’s greatest needs and to make government run as intended,” said Sherrill. “This starts with addressing the cost of living. Affordability is not a slogan to me; it is a basic measure of whether New Jerseyans can live a secure life.

These tough choices will help us redirect funding to serve people’s greatest needs and to make government run as intended.
– Gov. Mikie Sherrill

“This budget uses every tool available to take on rising utility costs. It invests in homeownership for first-time buyers and in new housing construction. And it targets property tax relief to those most in need.”

The governor acknowledged she has only been in office for a month-and-a-half — that there are many big things to do together.

“And while this is the most fiscally responsible budget proposal this state has seen in years, it’s just the start,” said Sherrill. “Reality is forcing us to change not just the way we do our budget, but how we approach our work. It’s asking us to make hard choices, for the sake of a better future.

“I know that we won’t back away from this mission – New Jerseyans never do. Together, we will build a future where workers can afford to live here, where our children are safe and can seize every opportunity, and where government delivers for the people and businesses it’s meant to serve.”

Please stay with NJBIZ for further coverage of the budget, including more details on exactly what’s in it – as well as reaction from leaders around the great Garden State.