Legislative leaders unveiled a revised $60.743 billion state budget Sunday that makes only a modest increase in overall spending from Gov. Mikie Sherrill’s original proposal while boosting projected revenues and preserving a substantially larger surplus to finance hundreds of targeted spending additions across New Jersey.
The FY 2027 appropriations bill totals $60.743 billion, just $15 million more than the governor’s budget message. But updated revenue projections added $288.2 million in anticipated collections, allowing lawmakers to increase the projected year-end surplus by nearly $663 million, leaving an expected closing balance of $6.49 billion, including more than $6 billion in unreserved surplus.
Much of the additional revenue comes from stronger-than-anticipated income tax collections. The budget assumes an additional $174.7 million in Gross Income Tax revenue, a $65 million increase in Business Alternative Income Tax collections, and a $50 million increase in Insurance Premium Tax revenue. Those gains offset weaker forecasts for sales tax collections, investment earnings, and several other revenue sources. Sales tax collections were revised downward by nearly $64 million, while investment earnings declined by almost $47 million compared to the governor’s proposal.
The revised budget also increases the state’s opening balance by nearly $390 million, providing lawmakers with additional flexibility as they negotiated the final spending plan. Even after accounting for the additional appropriations, the state expects to finish the fiscal year with one of the healthiest reserve positions in New Jersey history.
The largest spending increases are concentrated in a handful of departments. The Department of Community Affairs receives an additional $112.9 million; the Department of State gains $60.1 million; the Department of Children and Families receives $58.2 million; the Department of Health gains $36.6 million; and the Department of Transportation receives $21.4 million above the governor’s proposal. Offsetting reductions include a $253.2 million decrease in Human Services, a $21.4 million reduction in Education, and smaller cuts in Treasury and Interdepartmental Accounts.
Mental health, housing, and re-entry programs were among the biggest winners in the legislative negotiations. The budget provides $30 million for New Jersey Statewide Student Support Services (NJ4S), expands School-based Partnerships for Access and Resilience for Kids (SPARK), increases homelessness response funding by $10 million, adds $6 million for the State Rental Assistance Program, and significantly boosts funding for the New Jersey Re-entry Corporation and other offender re-entry initiatives. Funding also increases for domestic violence services, sexual violence prevention, Court Appointed Special Advocates, youth suicide prevention, child advocacy centers, and maternal health programs.
Food security and anti-hunger programs also received additional support. The budget adds funding for Regional Innovative Food Security Initiatives, community kitchens, local food pantries, food banks, and several nonprofit organizations providing meals and nutrition assistance throughout the state. It also increases the Working Class Families State Supplement by $3 million, further expanding aid for low-income residents.
The measure also contains hundreds of local grants and municipal aid items spread across every region of New Jersey. Among the largest are $15 million in operating aid for Jersey City, $9 million for Camden County property acquisition and demolition projects, $1.6 million in operating aid for North Bergen, $1 million for Lakewood, $1 million for Sayreville park improvements, $1 million for Carteret police station upgrades, and hundreds of thousands of dollars for fire departments, rescue squads, infrastructure improvements, parks, libraries, community centers, public safety initiatives, and social service organizations in municipalities statewide.
Legislators also restored or shifted funding for several existing programs through language changes in the budget bill, including affordable housing, rental assistance, food security initiatives, mental health programs, and code blue homelessness efforts. Other provisions authorize agencies to carry forward unspent balances from prior fiscal years for designated programs rather than allowing those funds to lapse.
