Gov. Mikie Sherrill is staring down a high‑stakes budget fight in her first year on the job, and the forces driving up New Jersey’s spending plan could hit residents directly in their wallets.
Rising school costs, soaring state employee health‑benefit premiums and the full launch of the Stay NJ property‑tax relief program are among the challenges the new administration is grappling with in a state budget crowded with obligations. (See how taxpayers could be affect by four of the big cost drivers below.)
The Sherrill administration has signaled that it does not plan to raise taxes in its first budget. That means proposals for spending cuts are likely.
“Spending cuts are a very important part of this,” acting State Treasurer Aaron Binder warned when pressed on the state’s budget plan during his confirmation hearing earlier this month.
Sherrill is scheduled to present her proposed budget next month. Then, lawmakers will debate the spending plan and try to get a budget approved and signed by the governor in June.
The Sherrill administration hasn’t indicated which cuts it plans to pursue. Any reductions will have to be negotiated with lawmakers who will have their own ideas. But Binder and several legislators have already pointed to the major cost drivers that could be targets for cuts.
Here’s what’s driving New Jersey’s state budget higher — and what it could mean for residents’ wallets.
Climbing school funding
The problem: School funding is the single largest line item in New Jersey’s budget, and it’s still growing. State requirements continue to push per‑pupil spending upward, meaning schools will need more aid heading into Sherrill’s first full fiscal year.
New Jersey has more than 600 school districts. Some lawmakers have said merging school districts to help save money should be a serious option this year.
A report from New Jersey Policy Perspective warned that school funding costs are part of larger “budget time bombs” left behind from earlier administrations that Sherrill will have to defuse quickly.