Earlier today Governor Murphy delivered his final budget address, a “Stronger, Fairer, and More Prepared for the Future” address. The 2026 State Fiscal Year budget proposal appropriates $58.1 billion and has a $6.3 billion surplus. The budget includes flat funding for Energy Tax Receipts/CMPTRA and Open Space PILOT and no appropriation for the Municipal Relief Fund.
Governor Murphy noted that with the budget proposal “our Administration will continue delivering economic security and opportunity to every New Jerseyan by providing yet another round of record-high tax relief.” 41% of the state budget will be distributed through school aid or municipal aid payments. The proposed budget includes $12.1 billion for K-12 schools in the school funding formula. It also includes $4.2 billion in Direct Property Taxpayer Relief (i.e. ANCHOR, Stay NJ, Property Tax freeze), and $1.65 billion for municipal aid. The Governor also noted that while the Consumer Price Index rose by 24% from 2017 to 2023, the average property tax bill rose 12.8%. In 2024, the average property tax bill increased $313 or 3%.
The proposed budget includes $7.2 billion for the State’s pension system and approximately $6.7 billion for State Health Benefits Program (state’s fund).
The proposed budget also includes an increase in the cigarette tax ($0.30 per pack increase to $3.00 per pack); Liquid Nicotine tax (to $0.30mL and container E-Liquid rate to 30%); alcoholic beverage tax (10% increase); internet gaming and online sports wagering tax (from 15% & 13% to 25%); a new $2 per truck traffic excise fee on warehouses; and increases the 1% assessment for homes purchased above $1 million to 2%, and home purchased for more than $2 increase to 3%.
In his budget remarks, when noting the affordable housing laws, the Governor stated that “and this year, we are going to build upon that accomplishment by reforming New Jersey’s zoning and permitting laws, so we can make it easier to build new, affordable housing where it is needed most.”
Prior to the Governor’s Budget address, Senate Republican Leader Anthony M. Bucco, Senate Republican Budget Officer Declan O’Scanlon, Senate Republican Whip Michael Testa, Senator Doug Steinhardt, and Senator Carmen Amato, Jr. sent a letter to Governor Murphy notifying him of intended legal action if the 2026 SFY budget uses income tax revenues placed in the Property Tax Relief Fund. In the letter, it was noted that the New Jersey Constitution requires funds from the Property Tax Relief Fund by annually appropriated pursuant to formulas.
We are currently reviewing the FY 2026 Budget in Brief and will provide a more detailed analysis of the proposed budget shortly.
Contact: Lori Buckelew, Deputy Executive Director, lbuckelew@njlm.org or 609-695-3481 ext. 112.