Government

FY27 Budget Raises Business Costs, Faces Transparency Questions as Final Passage Looms

By Jim Pytell, Managing Editor On Jun 30, 2026

With just hours left to meet the constitutional deadline for enacting a new state budget, the Senate and Assembly are set to vote today on a $60.7 billion spending plan and send it to Gov. Mikie Sherrill for her signature.

New Jersey’s Constitution requires the state to pass and enact a balanced budget by the start of the new fiscal year on July 1.

The spending plan, which was approved by budget committees in both chambers of the Legislature on Sunday, adds just $15 million to the spending plan proposed by Sherrill in March and calls for New Jersey to expend about $1.4 billion more than it takes in through taxes leaving the state with just over $6 billion in reserves.

While overall spending remained relatively flat, the budget, which will be Sherrill’s first, still hits the state’s job creators hard.

Major pain points for businesses include a per-employee Medicaid-related fee on larger employers, and a continuation of existing provisions such as limits on net operating loss deductions and restrictions related to certain corporate business tax deductions.

“The bottom line for the business community is that we are still under attack,” said Michele Siekerka, president and CEO of the New Jersey Business & Industry Administration (NJBIA). “Nearly all of the revenue-raisers in this budget are on the backs of businesses, despite the state having one of the worst business tax climates in the nation.”

Siekerka did add that NJBIA is pleased to see investments in Gov. Sherrill’s Saving Time and Money Agenda and the inclusion of NJMEP funding in the budget to help the state’s manufacturing sector. She said she also appreciates efforts with the budget to find efficiencies and keep spending relatively flat from last year.

“There are fewer current year add-ons this year, as well, but still too many when you consider that New Jersey is still less affordable after this budget than it was before,” Siekerka said. “At the end of the day, this budget still raises taxes on business – yet again – and uses some gimmicks to pay for the new spending, which inherently means a bigger structural hole in next year’s budget.” 

NJBIA worked to mitigate the temporary Net Operating Loss limit and the Alternative Business Calculation Deduction, and while compromises were made on the per-employee fee on businesses with more than 50 employees using Medicaid, Siekerka said that many of New Jersey’s job creators will be penalized for something which they have little to no control over.

“And, yes, workers on Medicaid will still be impacted,” she added. 

Other highlights of the spending plan include a call for $12.4 billion in aid to New Jersey schools, while maintaining caps on annual changes in school aid under the funding formula, limiting annual decreases in aid to 3% and increases to 6% for individual districts.

On property taxes, the Stay NJ income cap is being lowered to $200,000 from $500,000. Tax credits under the program, which offers property tax benefits to eligible homeowners aged 65 and older, would be capped at $6,500 for those making no more than $100,000; $5,000 for individuals with no more than $150,000 in earnings; and $4,000 for individuals making up to $200,000.

Under existing law, the program would have paid a maximum benefit of $6,500 to any senior homeowner who made no more than $500,000 annually. The changes are expected to cut the program’s annual cost from $1.2 billion to $742 million.

Questions on Transparency

Full budget language was released to lawmakers and the public on Sunday evening, leaving approximately 48 hours to fully review it before today’s final vote, which sparked renewed criticism of timing and transparency in the budget process.

Since she was on the campaign trail, the governor repeatedly touted her commitment to government transparency, particularly when it came to the budget.

Democrats defended the process, saying that key components and priorities of the budget were discussed publicly through hearings, committee testimony, and press coverage in the months leading up to the approval of its final version.

The Assembly GOP characterized it as, “the largest bill of the year, voted on with almost no time to read it.”

“It would not be hard at all to have a budget sit for a week or two weeks so the press [and lawmakers] can dissect it, so we can all know what we are voting for,” said Senate Republican Budget Officer Declan O’Scanlon.

“We cannot continue to find ourselves in the dark until the last minute, so we can understand what’s included and what’s not and what the impact on our taxpayers will be,” said Siekerka. “We continue to call for better transparency as we proceed forward.”

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