TRENTON—Governor Mikie Sherrill submitted a $60.7 billion FY2027 budget proposal to the 222nd New Jersey Legislature on March 10, 2026. Her proposed budged closes a $1.2 billion structural deficit through $2 billion in program cuts and $700 million in corporate tax loophole closures, without raising individual taxes and while providing a record $4.2 billion in property tax relief. Addressing the Legislature, the former U.S. Representative marked her first major fiscal initiative since taking office in January 2026. Sherrill stated the budget answers to people around kitchen tables rather than corporate boardrooms.

Tax Relief and Corporate Loopholes

The proposal reduces New Jersey's $3 billion structural deficit—driven by expiring COVID-19 relief funds and cuts from the Trump Administration—through nearly $2 billion in program cuts and $700 million in corporate tax loophole closures. It maintains the full $7.2 billion pension payment and protects the $7.2 billion surplus from depletion within two years.

Income eligibility for New Jersey's Stay NJ property tax credit would drop from $500,000 to $250,000 annually, affecting higher-earning households previously included under former Governor Murphy's expansion. This change targets relief to middle-class seniors while saving taxpayers hundreds of millions of dollars. The proposal expands ANCHOR benefits for low-income senior renters and allocates $70 million to the Affordable Housing Trust Fund.

Closing the net operating loss deduction for New Jersey's highest-earning companies would generate $500 million for the state. The Sherrill Administration estimates that limiting the Alternative Business Calculation Adjustment to businesses below $1 million income will add $120 million in revenue.

Federal Cuts and Employer Accountability

To offset Trump Administration Medicaid cuts threatening 300,000 residents, the budget includes $145 million from fines on employers with 50 or more workers receiving Medicaid, such as Amazon and Walmart. These large employers would pay fines unless they provide health coverage to their workers. The plan also addresses expiring ACA credits, affecting 500,000 residents facing tripled premiums.

Sherrill criticized last-minute spending additions from the Murphy Administration, citing $2.5 billion in tax breaks and $240 million in giveaways added during former Governor Phil Murphy's final days in Trenton. She committed to ending the practice of last-minute giveaways and stated that legislative additions would require corresponding cuts.

Pensions and Infrastructure

New Jersey pays nearly $6 billion annually in back pension obligations to the Public Employees' Retirement System and Police and Firemen's Retirement System due to 30 years of skipped payments by previous administrations, compared to New York State's $2 billion contribution. The current budget maintains the full $7.2 billion payment to honor promises made to public workers.

The proposal funds 40 new NJ Transit rail cars and 250 buses while protecting service levels from cuts. It provides resources to address utility rate hikes through the Board of Public Utilities. The budget supports six approved solar and battery projects along with natural gas modernization. Sherrill declared a State of Emergency in February to freeze utility rate hikes. She cited Kenilworth residents Herb and Mary Michitsch, who have lived in their home for 55 years and pay $400 monthly electricity bills, as an example of families facing high energy costs.

Ahead of the constitutional June 30 deadline for budget enactment, the plan now moves to Assembly and Senate budget committees in Trenton for hearings and potential amendments. Governor Sherrill pledged to work with both Democratic and Republican leadership after speaking with every member of the legislature during preparation.

Lieutenant Governor Dale Caldwell, Senate President Nicholas Scutari and Assembly Speaker Craig Coughlin attended the address, as did former Governors Chris Christie, Jim McGreevey and Donald DiFrancesco. Sherrill referenced her grandfather, a World War II pilot and UAW welder who raised eight children in a Works Progress Administration house, as inspiration for the budget's focus on opportunity.

Sources

• Office of the Governor, State of New Jersey: Prepared Remarks, "Rising to the Mission: A More Affordable & Accountable New Jersey" (March 10, 2026)

• NJBiz.com: "Sherrill: NJ budget would provide property tax relief" (March 10, 2026)

• NJ.com: "Sherrill to propose cuts to popular programs to close $3B deficit" (March 10, 2026)