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The basics:

• Gov. Murphy signs $58.8B NJ budget with record spending
• Includes tax hikes on sports betting, real estate, nicotine
• Delivers largest property tax relief package in state history
• Budget funds pensions, schools, colleges, manufacturing aid

Gov. Phil Murphy signed a record $58.8 billion fiscal year 2026 budget bill into law late Monday night — his final budget as governor of the great Garden State.

Earlier Monday, the full Senate and Assembly passed the spending plan. As NJBIZ has reported, the budget bill (Senate Bill 2026/Assembly Bill 5800) cleared committees late last Friday night.

That set the stage for this week’s passage and signing into law by Gov. Phil Murphy, who, notably, did not hold a formal signing ceremony as he usually does. Around midnight, the Governor’s Office issued a press release announcing the bill signing.

“This budget exemplifies our dedication to fiscal responsibility, affordability, and opportunity for all New Jerseyans,” said Murphy in a press release. “Over nearly eight years, we have maintained a steadfast commitment to building a stronger and fairer New Jersey and righting our fiscal ship.

“I’m proud that this budget caps off an eight-year journey to turn our state around and delivers greater economic security and opportunity to every family. With the help of our legislative partners, we are moving New Jersey toward a brighter future for every child, student, worker, parent, and senior citizen who calls our great state home.”

Core priorities

“This budget is a fiscally responsible plan that upholds the core priorities of New Jersey’s working families as we confront challenging economic and fiscal conditions,” said Senate President Nick Scutari, D-22nd District; Senate Majority Leader Teresa Ruiz, D-29th District; and Senate Budget Chairman Paul Sarlo, D-36th District, in a joint statement.

The lawmakers also noted the potential implications for New Jersey from the federal budget bill being hashed out in Washington, D.C.

Key things to know:

• Topline number is more than $700 million over the governor’s February budget message
• Surplus of $6.7 billion
• Includes tax increases on:
  • Nicotine/vaping
  • Sports betting/internet gaming
  • Realty transfer tax increase on homes and commercial properties
  • Eliminates some of the prior proposed increases, such as “fun taxes,” alcohol tax and warehouse trucking tax
  • Exempts baby products and sunscreen from sales taxes
• Makes a full pension payment
• Fully funds the school funding formula
• Largest property tax relief package in state history
• Features $500 million Next New Jersey Manufacturing incentive program (passed in adjacent legislation)
• Restores community college funding that original budget message called for

Along with the budget bill late Monday, Murphy signed a slew of other measures. The flurry includes a package of bills to support the innovation economy as well as legislation to enhance the state’s Film and Digital Media Tax Credit Program.

Also, just after Murphy signed the spending plan signed into law, Assembly Speaker Craig Coughlin, D-19th District, released a statement announcing the state received $2o0 million in “additional unanticipated revenue.” Coughlin said the funds will go toward addressing the state worker health insurance program. Previously, the negotiated deal between leaders had called for finding $100 million in savings in the program. That had incensed unions, who said it would violate collective bargaining agreements.

Coughlin says hearings will take place in July on public worker health benefits. They will also monitor any potential premium increases and their impact on public plans.

‘Milestone investment’

Of course, there is much to parse through in these coming days and weeks on what is – and is not – included in this spending plan.

“We are proud to deliver the largest property tax relief package in state history, a milestone investment that will ease the burden on homeowners and renters across the state,” said Scutari, Ruiz and Sarlo. “This budget continues to make significant investments in public schools, provides stable support for NJ Transit, and restores vital aid to our colleges and universities. Our commitment to long-term fiscal responsibility remains unwavering.”

The Senate leaders acknowledged that difficult choices were made; and that they were unable to restore all the funds for cuts that were made in the budget proposal.

“But these decisions were made with discipline, care, and a clear focus on protecting essential services and minimizing harm to vulnerable communities. This budget strikes a balance and serves as a foundation to advance our policy priorities. It is not the culmination of our efforts, but a launchpad for the work in front of us.”

GOP blasts spending

Republican lawmakers felt quite differently. They blasted Democrats for the increased and record spending, as well as the last-minute process.

“This is the eighth and final budget produced by this Democrat-led Legislature and the Murphy administration. And where have we ended up?” said Senate Republican Budget Officer Declan O’Scanlon, R-13th District. “You’re a hair’s breadth away from spending $60 billion – almost $25 billion more than Gov. [Chris] Christie’s last budget; with a freight train of spending momentum that will, mark my words, soon necessitate brutal cuts to programs or brutal tax increases on our beleaguered taxpayers – or both.”

O’Scanlon added, “The only reason this year was tough was because we’re starting to run out of that federal cash and one-shot gimmicks. Revenues have performed fairly well. A balanced budget with reasonable spending restraint would have made this a good year. The fact that it’s being referred to as tough is a dead canary in the budget coal mine. Because of the mess that this administration is leaving us, the next few years are going to be brutal. And I already hear the buck passing and beginnings of blame being shifted to President [Donald] Trump.

“This mess has zero to do with the federal government. It’s totally homegrown – and was totally avoidable.”

‘Much to appreciate and much to criticize’

Top Jersey business leaders weighed in with their takes on the budget bill.

“As with any major spending plan that attempts to satisfy the needs of so many different interests and programs, there is much to appreciate and much to criticize in this budget,” said Michele Siekerka, New Jersey Business & Industry Association (NJBIA) president and CEO. “We applaud the Legislature for working toward a budget that is by-and-large an improvement from what it was handed in February.

“But at the end of the day, there is another structural imbalance, more than $700 million in additional, last-minute spending and hundreds of millions of dollars in tax increases – particularly for the business community – for one of the highest-taxed states in the nation.”

New Jersey Chamber of Commerce President and CEO Tom Bracken said his organization is deeply disappointed.

“It marks the eighth-consecutive year of overspending and continues to show a troubling lack of focus on growing New Jersey’s current and future economies,” said Bracken. “This budget makes the state less affordable, less competitive, and less business friendly. Rather than driving progress, it maintains a status quo that has failed to deliver real economic success – and it’s what New Jerseyans want, as reflected in a recent Rutgers-Eagleton poll showing widespread dissatisfaction with the state’s economic direction.

Looking forward

“While we commend the governor and Legislature for including some positive elements in this year’s fiscal plan – such as support for manufacturers, restoration of community college funding, elimination of certain sales taxes, expedited building inspections and increased assistance for small businesses – these measures are overshadowed by deeper concerns about the state’s long-term fiscal health.”

Siekerka added, “Obviously, we didn’t get here overnight with a budget that has grown nearly 70% under Gov. Phil Murphy. But it is high time our policymakers look forward with a new approach under a new administration – no matter who our next governor is.”

Please stay with NJBIZ for continued coverage, analysis and reaction.