NJ tax revenue rises — but Sherrill still pushing budget cuts

🔹 New Jersey revenue forecasts improved slightly as lawmakers continue negotiations on the state budget.
💰 Gov. Mikie Sherrill is still pursuing spending cuts despite stronger-than-expected tax collections.
⚠️ Budget negotiations remain focused on affordability, school funding, transit, and long-term fiscal stability.

New Jersey’s revenue outlook has improved slightly heading into the final weeks of state budget negotiations, giving lawmakers modest additional flexibility as they work to finalize a spending plan before the July 1 deadline.

Updated projections released by the state Treasury Department and the Office of Legislative Services show tax collections are coming in somewhat higher than originally anticipated. Stronger-than-expected income tax collections and continued growth in internet gaming revenue helped boost the forecast.

Current projections have the state collecting about $59.2 billion in revenue, which would slightly reduce the state's structural deficit and hold about $6 billion in surplus reserve.

New Jersey revenue projections increase slightly

Despite the improved outlook, Gov. Mikie Sherrill is continuing to pursue spending reductions across multiple areas of state government as part of her proposed budget plan.

On Tuesday, Sherrill's treasurer, Aaron Binder, cautioned lawmakers about spending that extra cash due to "ongoing uncertainties" and said the governor's position on adding additional spending to her proposed budget remains the same: don't do it.

The Sherrill administration has argued budget cuts are necessary to maintain long-term fiscal stability and prepare for economic uncertainty.

Lawmakers are continuing negotiations over school funding, NJ Transit support, healthcare spending, property tax relief programs, and municipal aid.

Sen. Paul Sarlo, D-Bergen, suggested the additional revenue could be used to increase school funding.

Budget cuts remain part of negotiations

Republican lawmakers have continued criticizing overall state spending levels, arguing New Jersey residents remain burdened by high property taxes and rising living costs. Democrats have largely defended continued investments in public services and affordability programs while acknowledging concerns about future budget gaps.

Budget analysts have also warned that several large state obligations, including pension payments and property tax relief programs, are expected to continue placing pressure on future budgets.

The lure to spend more is strong among Democrats

The latest projections add additional drama to an already tense budget negotiation between Sherrill and Democratic lawmakers.

Assembly Speaker Craig Coughlin and Senate President Nick Scutari have balked at Sherrill's admonition not to add hundreds of millions of dollars in so-called Christmas tree or pork spending to her proposed spending plan.

During the previous Phil Murphy administration, this additional spending averaged nearly $1 billion in last-minute add-ons to the budget.

Sherrill has threatened to line-item veto those add-ons.

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