By Wells Winegar, Executive Director, New Jersey Policy Institute
The enactment of New Jersey’s $58.8 billion FY26 budget marks yet another year of record spending, rushed decision-making, and missed opportunities to address the state’s core challenges. While the budget includes major investments in pensions and public education, it also adds hundreds of millions in last-minute spending with little explanation, increases taxes, and leaves behind a significant structural deficit.
This approach is not sustainable—and it’s not serving the long-term interests of New Jersey residents.
A Growing Budget Without Guardrails
The budget increases overall state spending by 4% and relies on over $1 billion in new tax revenue to support it. Yet even with these tax hikes, the state will spend significantly more than it expects to bring in, creating a projected $1.5 billion budget gap. Rather than focusing on fiscal responsibility or structural reform, the state continues to patch holes with temporary fixes and new revenue demands.
New Jersey’s budget has grown nearly 70% in recent years. Despite this growth, affordability challenges persist, and critical areas like property taxes, healthcare costs, and small business relief remain inadequately addressed.
The added tax burden—especially on businesses and property owners—raises concerns about competitiveness and long-term economic growth. New Jersey continues to rank among the highest-taxed states in the nation, yet the return on investment for taxpayers remains uncertain.
A Broken Process
One of the most troubling aspects of this year’s budget is the way it was finalized. Hundreds of new spending items were added behind closed doors in the final days, many of which appear targeted toward specific localities or favored organizations. These additions, while sometimes well-intentioned, were not subject to robust public debate or scrutiny. There is minimal information available about why these funds were awarded or what outcomes they are intended to achieve.
This opaque process erodes public trust and undermines accountability. When major spending decisions are made with limited transparency, it becomes difficult to evaluate priorities or ensure resources are being used effectively.
Time for a Better Approach
New Jersey needs a fundamentally different approach to budgeting—one grounded in transparency, long-term planning, and measurable impact. That includes:
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Requiring early public disclosure and justification for all budget additions
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Prioritizing structural reforms over short-term fixes
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Limiting one-time or politically driven spending
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Centering affordability, efficiency, and fairness in every fiscal decision
At the New Jersey Policy Institute, we believe state government should be accountable to the people it serves. That begins with a budget process that is honest, transparent, and focused on results—not politics.
This year’s budget may be finalized, but the conversation about our fiscal future must continue. New Jersey families and businesses deserve better—and it’s time for leaders across the political spectrum to deliver.
