The Democrats who control the Legislature are getting ready to clear nearly $360 million in fast-tracked new spending in the waning hours of the 2026 fiscal year.
To do that, they introduced and then approved a supplemental spending bill in the Assembly and Senate budget committees during a blitz of legislative activity that lasted until just before midnight at the State House on Sunday.
The late-night whirlwind sets the stage for final approval of the supplemental spending bill on Tuesday, the final day of the fiscal year. That’s the same day they are planning to approve the $60.7 billion budget for the fiscal year that begins on Wednesday.
Sunday’s spending votes have rekindled long-simmering debates about transparency and fairness in the process when the state budget itself continues to be saddled by a wide structural gap.
Republicans have taken issue particularly with the inclusion of $40 million in new appropriations related to the World Cup international soccer tournament in the supplemental spending bill. That comes as many school districts they represent are set to lose state aid under New Jersey’s current K-12 school-funding formula.
Assemblyman Michael Inganamort (R-Morris), as he voted against the supplemental spending measure late Sunday, noted that the state was adding nearly $360 million in spending “but can’t restore $54 million in cuts to our schools,”
“I think that’s really disappointing,” Inganamort said.
Aid for towns
Among other appropriations, the $358.8 million supplemental spending bill includes funding for many largely parochial line items, such as $5 million for a recreation center in Wood-Ridge, where Senate Budget and Appropriations Committee Chair Paul Sarlo (D-Bergen) is mayor.
Several municipalities apparently chosen without a public selection process will receive what’s labeled “operating aid,” according to a copy of the bill provided by legislative staff prior to its appearance on the Legislature’s website on Monday.
Among them are Linden, Plainfield and Rahway, three Union County communities in the legislative district represented by Senate President Nicholas Scutari (D-Union).
The supplemental spending bill also covers a more than $100 million loan and provides other funding for Jersey City to help alleviate a significant municipal budget shortfall there.
It’s not known publicly how these and other items listed in the supplemental spending bill were selected for funding and whether any open or competitive process was used to direct the last-minute appropriations.
Spokespeople for the Senate and Assembly majority offices did not immediately answer several questions about the origins of the supplemental spending bill sent by NJ Spotlight News via email Monday.
Also unknown is whether Sherrill has agreed to approve the supplemental spending measure as part of a broader budget pact that she and legislative leaders announced last week.
A spokesperson for her office did not immediately address that question Monday when reached for comment for this story.
‘Bad habit’
The budget pact was first outlined in a joint statement issued last week by Sherrill, Scutari and Assembly Speaker Craig Coughlin (D-Middlesex). It came amid behind-the-scenes negotiations that culminated in the drafting of a $60.7 billion spending bill for the new fiscal year that begins Wednesday.
That topline spending total roughly aligns with the sum for overall appropriations that was included in a fiscal year 2027 budget plan unveiled by Sherrill on March 10.
It will also result in a reduction of a structural gap that was at one point projected to hit $3 billion by the Sherrill administration. That’s something majority Democrats highlighted on Sunday as they defended their party’s supplemental spending proposal.
A former congresswoman who is a newcomer to state government, Sherrill has been adamant about holding the line on overall spending this year. She has suggested that the structural budget gap threatens the state’s long-term financial sustainability.
And she seemed to take a hard stance on added spending – a time-honored tradition in Trenton – during her March 10 budget address.
“Our work starts by ending previous administrations’ bad habit of tacking last-minute giveaways onto each budget,” Sherrill said at the time. “These days, we simply can’t afford that.”
The Sherrill administration did receive some fiscal breathing room last month when officials from the Department of the Treasury issued updated revenue forecasts. That resulted in nearly $340 million added to tax collection estimates for the current fiscal year, and another more than $160 million to the forecast for the next fiscal year.
Lawmakers, though, immediately started pointing to a revenue “windfall” as they looked to the end of June. The only question was how much revenue from the updated forecasts would be used to fund additional spending instead of building back the state budget’s reserve account, which once totaled more than $10 billion, and has been raided in recent years to help bridge structural gaps.
‘Affordability budget’
The fiscal year 2027 spending bill expected to win final approval on Tuesday calls for a nearly $7.7 billion opening surplus to be reduced to $6.03 billion by this time next year, according to a score sheet prepared by nonpartisan legislative staff.
In a statement sent to NJ Spotlight News, Sherrill spokesperson Sean Higgins called the final fiscal year 2027 spending plan an “affordability budget” that increases funding for property tax relief and expands New Jersey’s child tax credit.
He also said Sherrill’s first budget “held the line on spending” and “cut the structural deficit in half, putting us on stronger financial footing for future years.”
As to the supplemental spending bill, Higgins said that is “a result of higher revenues; a timely and necessary loan for Jersey City, which is addressing the extraordinary mismanagement by former Mayor (Steve) Fulop, who stuck Jersey City families with a $250 million budget shortfall; and several necessary line items from the previous administration’s policy decisions.”
Republican lawmakers, though, are accusing Sherrill of offering only a veneer of fiscal restraint and accountability. And they’ve been pointing to the supplemental spending bill drafted by her fellow Democrats as proof that the practice of authorizing last-minute spending with little public oversight in the final days of June remains alive and well.
“I have to hit on the fact that it’s just in the last couple of hours that we’ve been able to take a look at this,” Sen. Declan O’Scanlon (R-Monmouth) said as the supplemental spending bill came to a committee vote late Sunday.
“There are hundreds of line items that would have been spending in the (fiscal year) 2027 budget that are now being backfilled, or pre-filled, by the supplemental bill,” O’Scanlon said.
Inganamort personally faulted the governor after he was forced to vote on a 358-page fiscal year 2027 spending bill on the same day it was introduced by his majority Democratic counterparts.
“I’ve had a number of people tell me that that’s just the way it is, that that’s just the process,” Inganamort said. “It’s not. This isn’t normal. This isn’t right, and what makes it even harder to justify this year is that the governor specifically promised it would be different.”
“New Jersey deserves better than this,” he said.
