Governor Phil Murphy has unveiled his proposed Fiscal Year 2026 (FY2026) budget, outlining a $58.1 billion spending plan aimed at bolstering economic security, funding essential services, and maintaining New Jersey’s fiscal stability. The budget, which prioritizes property tax relief, public education, health care, and infrastructure, reflects Murphy’s vision of a “stronger, fairer, and more prepared” state as he enters his final year in office.
Gov. Murphy’s budget proposal maintains historic levels of property tax relief, allocating nearly $4.3 billion to programs such as:
- ANCHOR (Affordable New Jersey Communities for Homeowners and Renters)
- Stay NJ, which reduces property taxes for senior homeowners
- Senior Freeze Program
The budget also proposes over $750 million in relief through child tax credits and income tax programs, including a new sales tax exemption on baby supplies.
Murphy’s proposal sets a record for public education funding, with $12.1 billion for K-12 schools and $1.3 billion for pre-K expansion. The state aims to fully fund the school formula for the second consecutive year while capping aid losses for districts to ensure financial stability.
The budget also includes:
- $10.5 million for high-impact tutoring
- $3 million for phone-free schools initiatives
- $7.5 million for literacy improvements
- $350 million for school construction projects
The proposal earmarks $6.3 billion for Medicaid (NJ FamilyCare), supporting over 1.8 million New Jersey residents. Additional health care investments include:
- $52 million for reproductive health care access
- $36 million for maternal and infant health home visits
- $3.2 million for the Maternal and Infant Health Innovation Authority
- $3.6 billion for hospital subsidies
To address the opioid crisis, New Jersey will expand harm reduction programs and fund $120 million in opioid recovery initiatives.
The Murphy administration continues to focus on affordable housing, with:
- $40 million for first-time homebuyer assistance
- $108 million for affordable housing programs
- $5.5 million for homelessness prevention initiatives
The budget also includes $20 million for innovation centers supporting clean energy, fintech, and AI development.
With $902.5 million allocated to NJ TRANSIT, Murphy seeks to modernize New Jersey’s mass transit system, replacing outdated trains and buses while stabilizing the agency’s finances through the Corporate Transit Fee.
The $2 billion Transportation Capital Program will fund highway, bridge, and transit improvements, including pedestrian safety initiatives.
The budget proposal includes a $6.3 billion surplus, significantly larger than when Murphy took office. It also maintains a commitment to fully funding pension payments for the fifth consecutive year, with a $7.2 billion contribution, strengthening New Jersey’s credit rating.