Over the past eight years, New Jersey’s state budget has grown at nearly twice the rate of inflation. From FY2018 to FY2026, New Jersey’s budget grew more than 60 percent while inflation was only about half that. In June, Governor Mikie Sherrill signed into law a FY2027 budget of over $60.7 billion, which represents a more modest increase than prior years’ budgets. Nevertheless, the FY2027 budget maintains the State’s ongoing structural budget imbalance: the enacted budget forecasts revenues from taxes, fees, and transfers of less than $59.4 billion, while appropriating $60.7 billion in spending; this more than $1.3 billion gap is financed using a nearly $7.7 billion cash surplus accumulated in prior years.1 This pattern of implementing structurally imbalanced budgets is an ongoing concern for New Jersey.
Legislative add-ons remain a distinct layer of discretionary spending beyond the appropriations contained in the Governor’s initial budget proposal. These legislative add-ons – outlined in a GSI report earlier this year – total roughly $574 million in FY2024, $741 million in FY2025, $3.904 billion in FY2026, and $481 million in FY2027. The FY2026 add-ons add about $411 per resident in additional taxes, or $1,084 per household.
The FY2026 spike was highly concentrated: four departments accounted for roughly 78 percent of legislative add-ons, led by Education. FY2027 is smaller to date, but 355 projects benefiting 316 entities have already been identified. The add-ons also direct significant funding outside state agencies: in FY2025, for example, local governments and private entities received approximately two-thirds of all legislative additions, while they account for 45 percent of FY2027 additions identified to date. Therefore, the issue is not simply the amount of the spending, but the use of targeted legislative appropriations to direct state resources to specific recipients and projects without public debate or oversight.
