'Downside risks' still looming over state finances
By: Katie Sobko
NorthJersey.com
USA Today Network - New Jersey
..... Though public hearings were held in March, [2026] New Jersey lawmakers formally started their review of the proposed state budget on April 6 [2026] by listing to testimony from state officials, with the treasurer and the Office of Legislative Services explaining where the state stands financially.
.....
Experts stressed caution, because a volatile market and overall uncertainty could affect revenues for the state.
..... "While current economic forecasts reflect cautious optimism, downside risks have become more pronounced," said Oscar Mendez of the nonpartisan Office of Legislature Services.
..... "Consumer spending and the labor market - two key pillars of economic health and, by extension, stable state revenue - are facing growing pressures," he said.
.....
Mendez went on to say that things like the tariffs and "exacerbating geopolitical developments" can have an impact on the state.
..... Treasurer Aaron Binder noted that Governor Mikie Sherrill's proposed budget stressed affordability but involved some "very tough choices.
.....
"We need to focus on finding ways to run government more efficiently and effectively while looking carefully at ways tor educe costs and raise revenue without unduly burdening our taxpayers or straying form a path of fiscal responsibility," he said.
Will Stay NJ survive?
...... Lawmakers asked how the state is situated when it comes to financing Stay NJ, the much-touted property tax rebate program for seniors that just started paying out after three years of funding.
..... The governor's proposed budget would modify the eligibility for Stay NJ to cap the qualifying income threshold at $250,000. the payout amounts would also be capped at $4,000 in an effort to lower the cost of maintaining the program. The current cap is $6,500.
..... "It's still going to cost the state about $700 million, which is up form $280 million last year [2025] because the state had used three years to build up enough money to launch the program.
.....
The budget is in the Legislature's hands after Sherrill proposed a $60.7 billion fiscal plan, the highest in state history, for fiscal year 2027 in a speech last month. [03/2026]
..... The governor's plan includes about $2 million in cuts, much of which Thomas Koenig, legislative budget and finance officer, said was "probably initiatives that the Legislature added to the budget last year [2025] and that the governor recommends to eliminate in fiscal 2027."
..... Sherrill also addressed the Legislature's penchant for port spending, noting that "we simply can't afford" what she referred to as "previous administrations' bad habit of tacking last-minute giveaways onto each budget."
..... Ahead of her budget address, Sherrill spoke to the media about the state's structural deficit. She said it could rise as high as $3 billion by the end of June. [2026] Her plan includes a structural deficit of $1.6 billion.
..... "There have been too many one-offs, too many one-offs, too many temporary fixes, too little willingness to challenge what's always been done," she said. "It's time to close the deficit the right way, structurally, so we're not just plugging new holes every year."
..... The budget will continue to be reviewed - and most likely expanded - by the Legislature before a final bill is voted on at the end of June [2026] and sent to Sherrill's desk for her signature.
..... Katie Sobko cover the New Jersey Statehouse. email: sobko@northjersey.com