New Jersey’s proposed $58.1 billion budget plan includes $1.2 billion in new taxes and fees while also directing nearly $4.3 billion for property tax relief, upholding the ANCHOR program, fully supporting school districts, and providing additional financial aid to New Jersey Transit. The budget is $70 million smaller than last year’s but is still a challenge as federal dollars are decimated.
“Our budget proposal for the next fiscal year reflects our ongoing — and unrelenting — commitment to building a New Jersey that is stronger, fairer, and more prepared for the future,” Murphy said in a statement. “Over the past seven plus years, we have made historic progress in advancing this mission, but we’re not done yet. And over the next year, our absolute top priority — as it has been since day one — is delivering economic security and opportunity to every New Jerseyan.”
The governor gave his final budget address on Tuesday, Feb. 25.
Read more: Tune In Today As NJ Gov. Murphy Gives His Last Budget Address
Taxes, Senior Freeze, and ANCHOR
The proposed budget would continue funding for Senior Freeze, New Jersey’s property tax reimbursement program for seniors and disabled residents, with a $239 million allocation to benefit more than 235,000 taxpayers.
Murphy also proposed additional funding for the forthcoming Stay NJ program, dedicating $600 million in resources to significantly reduce property taxes for more than 432,000 senior homeowners.
The budget proposes $2.4 billion for the continuation of the ANCHOR program, which is estimated to benefit over 2 million homeowners and tenants. Now in its fourth season, the ANCHOR program has so far provided more than $6.4 billion in direct tax relief.
Child Care and Baby Items
Recent expansions of the Earned Income Tax Credit, the Child and Dependent Care Tax Credit, and the Child Tax Credit, will be maintained in the FY2026 budget. The budget also includes new sales tax exemptions for baby items, including cribs, car seats, nursing bottles, strollers, and even sunscreen.
“This budget builds upon this Administration’s commitments to making New Jersey more affordable, prioritizing good fiscal stewardship, strengthening our economy, and building healthy communities,” said State Treasurer Elizabeth Maher Muoio. “We look forward to working with our partners in the Legislature to deliver a final budget that benefits New Jerseyans across our state.”
Homeownership, Rental Assistance
Over $50 million is earmarked to boost New Jersey’s housing supply and make homeownership more affordable. The investment includes $10 million to incentivize the creation of new accessory dwelling units (ADUs), $15 million to help rental assistance recipients find pathways to homeownership and non-profits rehabilitating homes in need of repair, and $32 million for Down Payment Assistance.
Over the last four years, the Administration has invested almost $120 million into down payment assistance for thousands of families.
The proposed budget also includes new funding for the RetireReady NJ program (formerly the Secure Choice Savings Program). The program offers a new option for retirement savings for private sector employees.
Surplus and Community Aid
A proposed surplus of $6.3 billion includes redirecting over 74% of the total budget back into our communities in the form of grants-in-aid for property tax relief, social services, and higher education, as well as State aid to schools, municipalities, and counties.
The budget also proposes:
◾$165 million for the continuation of Cover All Kids
◾$61.2 million for the Pharmaceutical Assistance to the Aged and Disabled (PAAD) and Senior Gold programs
◾$52 million for family planning services and reproductive health programs
◾$35.8 million for Family Connects NJ, which has provided nearly 2,500 free in-home nurse visits to families with newborns and is now available in 11 counties.
◾$10 million for a new initiative to provide State employees with full pay while they take family leave to care for a newborn, adopted, or fostered child.
◾$12.1 billion for K-12 schools, a $3.9+ billion increase since FY2018.
“This proposal also addresses district feedback about the formula by capping losses in major school aid categories and reducing input volatility, ensuring no district sees a steep reduction in aid from one year to the next. K-12 State aid will not decrease by an amount greater than 3% of the prior year State aid in four primary categories: equalization, special education, security, and transportation,” according to the governor’s office.
Full Day Kindergarten, Phone-Free Learning
◾Full-day kindergarten in every school district
◾$7.5 million high-impact tutoring grants for students needing extra academic support
◾$3 million incentive grants for schools wishing to implement phone-free learning environments
◾$1.27 billion for preschool education aid, with a goal of forging a path towards free universal preschool in New Jersey.
Since 2018, the Murphy Administration has expanded pre-K to 229 school districts and created nearly 20,000 new seats, the governor’s office said.
Economic Opportunity and Community Growth
With New Jersey now a major player in the innovation, clean energy, and entertainment industries —while scoring numerous FIFA World Club Cup and FIFA World Cup games — Murphy’s proposed FY2025 budget aims to build on these opportunities.
The Murphy administration had a goal of positioning New Jersey as an influencer in the innovation economy and helped ensure Princeton University’s AI Hub had everything it needed for a successful launch. The state budget includes monies to continue that end, while embark on other innovation journeys.
◾$4.5 million innovation challenge to reward innovators for solving public-facing problems using State data
◾$500,000 to fund the AI-focused Global Entrepreneurs-in-Residence pilot program to help international students at New Jersey universities launch cutting-edge businesses
◾$2.5 million to help budding entrepreneurs build out start-ups related to general AI and connect with the AI innovation hub
builds upon these accomplishments by combining ambitious investments with important support for local communities.Furthering the Administration’s goal of positioning New Jersey atop the innovation economy, the budget proposes a suite of initiatives to advance the Governor’s AI Moonshot and augment the AI Hub being created at Princeton University – including $4.5 million to establish an innovation challenge to reward innovators for solving public-facing problems with State data; $500,000 to fund the AI-focused Global Entrepreneurs-in-Residence pilot program to help international students at New Jersey universities launch cutting-edge businesses; $2 million to fund AI education in K-12 classrooms and develop new Career and Technical Education programs targeted to AI; and $2.5 million to help budding entrepreneurs build out start-ups related to general artificial intelligence and connect with the AI innovation hub.
As New Jersey continues to be a leader in enacting climate change reforms, this budget proposes $15 million in State funds and $25 million from the Clean Energy Fund to provide the State match for a federal electric grid modernization program to upgrade our infrastructure to meet our climate goals.
The FY2025 budget also continues Governor Murphy’s vision for economic growth and support for small businesses with continued funding for the Main Street Recovery Program, a successful program providing multiple financial assistance products targeted to the growth and success of small businesses in New Jersey. Additionally, the budget also continues support for Manufacturing Initiatives and Strategic Innovation Centers, bringing the total investment in all three to over half a billion dollars over the past five years.
The budget also includes continued funding for initiatives like the employee stock ownership plan to help reduce wealth disparities, along with initial funding to begin addressing the findings from the recently published study on disparities in State procurement.
Building on the Administration’s investments in New Jersey’s job and small business growth, the budget provides several programs to expand workforce development, including $5 million to launch a Nursing Workforce Initiative, a suite of workforce programs designed to ensure future nurses have experienced faculty and the resources they need to complete their training; increasing the Behavioral Healthcare Loan Redemption Program by $2 million; and providing an additional $10 million for the Firefighter Grant program.
Governor Murphy is committed to building a stronger and fairer New Jersey where all families have a fair shot at a better future. The FY2025 budget proposal expands opportunity, reduces longstanding inequities, defends fundamental rights, and protects public safety.
To that end, the FY2025 budget proposes a two-year, over $30 million initiative to end veterans’ homelessness through services and interventions to help place over 1,000 homeless veterans in New Jersey into stable housing.
Recognizing the emergent needs residents sometimes face, Governor Murphy has proposed increased rates for emergency hotel and motel placements to help families in need of emergency housing.
The proposed budget also builds on the successful ARRIVE Together program, which brings police and mental health professionals together to respond to crises, proposing an additional $10 million to nearly double last year’s investment – to expand the initiative to new municipalities while boosting hours of availability.
This budget also includes new investments in the parole system and the Office of the Public Defender to protect civil rights and maintain New Jersey’s exceptionally low recidivism rate.
New Jersey’s Future
State lawmakers have to signoff on the budget by June 30, or a government shutdown hangs in the wings.
, New Jersey’s infrastructure remains the backbone of America’s economy. The budget includes $1.23 billion for critical investments in State and local highway and bridge projects, and another $767 million for NJ TRANSIT capital projects.
The FY2026 budget proposes an additional $20 million for Strategic Innovation Centers (SICs). The Murphy Administration has helped launch ten new SICs that have already drawn in over $250 million in funding from the private sector, positioning New Jersey’s entrepreneurs, workers, and students to lead the industries of tomorrow.
The proposal supports building upon the success of the Cannabis Regulatory Commission, which has overseen billions of dollars of legal cannabis sales, including more than $1 billion in 2024 alone, with sales expected to produce $90 million in tax and fee revenues this year.
Continuing the Administration’s commitment to advancing clean energy, the budget includes $50 million for the Charge Up NJ program from the Clean Energy Fund, moving closer to the State’s nation-leading goal of 100 percent clean electricity by 2035.
About New Jersey
The most densely populated state in the country, New Jersey is the fifth-smallest state in land area (7,354 square miles), but the 11th largest in population (9.5 million residents). It’s also the only U.S. state where every single county — all 21 — are considered 100% urban by the U.S. Census Bureau.
In the next fiscal year, the Garden State will need roughly $26 billion in federal aid to support its programs.
New Jersey’s 2023 annual median household income of $99,781 is the third highest of all 50 states, with Washington, D.C. ($121,944) first and Massachusetts ($99,858) second. New Jersey has the most millionaires in the country, representing about one-tenth of all households, or over 323,000. New Jersey’s public school system consistently ranks at or among the top of all U.S. states.
Other facts:
◾564 municipalities
◾2 U.S. Senators
◾12 U.S. Representatives
◾40 N.J. State Senators
◾80 Members of the General Assembly
◾~450 diners
◾3,397,156 households (as of 2021)
◾299 public libraries
◾2,522 public schools
◾31 public colleges and universities
◾1,368 square miles of water
◾8,723 square miles total area
◾126 miles along the Atlantic oceanfront from Sandy Hook to Cape May
◾400+ publicly accessible lakes, ponds, and reservoirs
◾38 state parks and recreation and natural areas
◾11 state forests
◾48 historic sites
◾150+ memorial sites
◾6 state marinas
◾39,000 miles of public roadways
