Governor Phil Murphy has signed into law the $58.78 billion Fiscal Year 2026 Appropriations Act, following its approval by the Legislature on Monday. The budget directs more than 75% of its funding to communities through grants-in-aid for property tax relief, social services, higher education, and state aid to schools, municipalities, and counties.
The budget includes record-high investments in several priority areas. It provides the largest-ever amount of direct property tax relief for homeowners and renters, achieves the highest level of school funding in state history, and marks the fifth consecutive year of a full pension payment. Additionally, the budget supports women’s and family health services and allocates funding to begin modernizing NJ TRANSIT’s fleet.
New Jersey’s surplus is projected at $6.7 billion, 16 times higher than the surplus inherited by the administration in 2018. This year’s budget includes a $7.2 billion pension contribution, bringing total Murphy Administration pension funding above $47 billion.
The spending plan also incorporates tax policy changes, including increases for the highest tier of realty transfer fees, sports betting, and cigarettes and vaping, as well as new exemptions for small business investments and reforms to the Angel Investor Tax Credit.
Direct property tax relief measures total nearly $4.3 billion, including continued funding for the ANCHOR and Senior Freeze programs, as well as $600 million to support the Stay NJ program beginning with the 2025 tax season.
On education, the budget includes $12.1 billion for K-12 schools, a nearly $4 billion increase since 2018, and caps reductions to school aid to limit volatility for districts. It also proposes $7.5 million in new grants for high-impact tutoring and $3 million for schools to adopt phone-free environments.
Preschool funding is set at $1.27 billion, continuing an expansion that since 2018 has brought pre-K to 229 districts and added nearly 20,000 seats.
Transportation investments include $1.23 billion for state and local highway and bridge projects and $767 million for NJ TRANSIT fleet modernization. Higher education will receive $932.9 million in institutional support, nearly 50% more than in 2018, along with $250 million in new capital bonding.
The budget also commits $222 million from the Debt Defeasance and Prevention Fund for a new correctional facility to replace the Edna Mahan Correctional Facility for Women.
Governor Murphy signed the Appropriations Act into law as S-2026/A-5800, appropriating $58.78 billion in state funds and $31 billion in federal funds for Fiscal Year 2026.