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The basics:

• Sherrill, legislative leaders agree on $60.7 billion FY2027 budget
• Deal restores about $100 million in funding for Stay NJ program
• Budget includes expansion of New Jersey Child Tax Credit
• Legislature expected to approve spending plan before June 30 deadline

Gov. Mikie Sherrill and Democratic legislative leaders have reached an agreement on a $60.7 billion Fiscal Year 2027 budget. The spending plan largely preserves the governor’s original blueprint, while restoring some funding for Stay NJ as well as bringing back other legislative spending priorities.

The New Jersey Globe first reported the finalized deal Monday night. The consensus among Sherrill, Senate President Nick Scutari, D-22nd District, and Assembly Speaker Craig Coughlin, D-19th District, paves the way for the state Legislature to pass the spending plan. The governor must sign the budget bill into law ahead of a June 30 constitutional deadline.

The agreement keeps overall spending at the same level Sherrill proposed in March when she unveiled her first budget as governor.

Stay NJ

One of the most significant areas of negotiation involved Stay NJ, the senior property tax relief program championed by Coughlin. In her original budget proposal, Sherrill sought to scale back the program.

Her proposal would have reduced funding by roughly $500 million from the approximately $1.2 billion originally envisioned under the program’s rollout. The governor’s plan allocated just under $700 million for Stay NJ while also tightening eligibility standards and reducing maximum benefits.

Under the final agreement, lawmakers restored approximately $100 million to the program. Stay NJ will remain smaller than originally planned. However, the compromise secures additional funding and restructures benefits to direct more assistance toward lower-income seniors.

The budget deal also restores some programs and legislative add-ons that Sherrill did not include in her original proposal. Those add-ons are described as “Christmas Tree items,” because they are attached to the budget late in the process. And frequently become a source of political debate during the final weeks of negotiations.

The agreement also includes an expansion of the state’s Child Tax Credit. The incentive marks another priority highlighted by Democratic leaders as part of the final compromise package.

The budget agreement comes after stronger-than-expected tax collections this spring. The modestly improved state fiscal outlook helped to reduce projected budget gaps and increase anticipated reserves during negotiations.

Striking a balance

In a joint statement released Tuesday, Sherrill, Scutari and Coughlin said the agreement strikes a balance between affordability initiatives and fiscal responsibility.

“We are pleased to have worked closely together to reach an agreement on an FY 2027 budget that makes New Jersey more affordable and protects our state from the Trump Administration’s dangerous policies that harm residents,” the three Democratic leaders said.

“The $60.7 billion budget provides tax relief to New Jerseyans who need it most while investing in our shared future with an expanded Child Tax Credit benefit for families. It offers the most property tax relief in the state’s history, ensuring StayNJ is a sustainable benefit retirees can count on.”

The leaders also pointed to the budget’s long-term fiscal outlook.

“At the same time, this budget cuts the state’s structural deficit in half, continues to fully fund pensions, and increases the budget surplus we need to fight the Trump Administration’s unprecedented attacks on Medicaid, food assistance, affordable health care, and jobs – all of which are increasing costs for New Jerseyans,” the leaders said.

“We are proud that this budget agreement will help families across New Jersey and look forward to its passing in the coming days.”

Republican pushback

Republican lawmakers, however, criticized both the process and the lack of publicly available details about the final spending plan.

Senate Republican Budget Officer Declan O’Scanlon, R-13th District; Sen. Michael Testa, R-1st District; Sen. Doug Steinhardt, R-23rd District; and Sen. Carmen Amato Jr., R-9th District, blasted both.

“Transparency matters and the lack of it speaks volumes. How much of the proposed $1 billion in tax increases is actually part of the budget deal?” the senators said in a joint statement.

They continued, “How much is a hidden bailout for Jersey City and Newark after years of fiscal mismanagement by their mayors? How much is political pork for a handful of towns’ tiki bars while 500 other municipalities and their property taxpayers get stuck with flat funding and higher bills from Trenton?”

Closed-door discussions

The Republican senators also raised concerns about school aid allocations and the use of remaining federal COVID-19 funds. They also highlighted what they characterized as a continuation of closed-door budget negotiations.

“How much political favoritism is being directed to select school districts while hundreds of other schools and their taxpayers face cuts or are denied the formula increases they were promised? How is the remaining $2 billion in unspent COVID funds being shifted around behind closed doors, and what political favors are attached to those decisions.

“The public doesn’t know,” they said. “Everything is being negotiated behind closed doors, and even the final budget won’t answer those questions. A new governor may put a fresh coat of paint on the process, but it’s still the same broken state budget — one that treats fairness, transparency, and taxpayers as an afterthought.”

The Legislature is expected to advance budget legislation in the coming days. It will then head to the governor’s desk for signing.

This story is developing. Please stay with NJBIZ for the very latest.