Budget hearings get underway in Trenton

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The first public hearing of the Fiscal Year 2026 budget season was a marathon – running over seven hours as residents and organizations testified and offered their feedback and concerns about Gov. Phil Murphy’s proposed $58 billion spending plan.

While last year’s budget was marked by the corporate transit fee, this year’s process sees several different elements colliding, including tighter budget conditions, uncertainty at the federal level and potentially devastating decreases to Medicaid and more – along with calls for cuts to certain initiatives and programs as well as fees and taxes on particular items, including a number of “sin taxes.”

The Assembly Budget Committee held its first hearing March 19 in Trenton.

“Thank you everyone for coming today,” said Assembly Budget Chair Eliana Pintor-Marin, D-29th District. “It’s nice to see the room packed – not necessarily great because that means we have quite a few issues that are ongoing and to discuss. We know that this is, obviously, a tough budget – and we’ll continue to have major ongoing discussions in the next couple of months.”

Over the next seven-plus hours, those who testified spoke about topics and areas such as higher education, housing, health care, taxes, spending and much more.

Teaching and transit

“Thank you to this committee and to the entire state Legislature for restoring funds to community colleges in last year’s state budget,” said Maria Heidkamp, chief innovation and policy officer at the New Jersey Council of County Colleges, as she testified about proposed cuts to community colleges. “This year’s budget is far worse – with devastating cuts to operating aid, financial aid, and student success initiatives, among others.

“As you can see, I am here today with a large delegation of presidents and students united on behalf of our 18 community colleges that together educate 240,000 students of all ages and backgrounds in academic and workforce programs every year.”

Business organizations gave their input on several points – with Hilary Chebra, director, Government Affairs for the Chamber of Commerce Southern New Jersey leading off the block for the state’s top business groups.

Chebra noted concerns about the proposed $2 per truck fee at warehouses as well as increases in internet gaming and sports wagering tax rates – while pointing out South Jersey transportation needs and calling for 15% of CTF proceeds to be dedicated to regional-specific projects.

“We remain extremely concerned about the massive increase in spending over recent fiscal years and the increases in taxes that will make life less affordable for businesses and residents alike,” said Chebra. “We urge the Legislature to allocate dedicated funding for transit improvements in South Jersey – ensuring that our region receives equitable access to transportation resources.”

Supporting businesses

Michael Egenton, executive vice president, Government Relations, New Jersey Chamber of Commerce, said that the proposed budget reflects the concerns that the Chamber has vocalized for several budget cycles.

“With the federal COVID dollars starting to dwindle and threatened cuts to federal funding, it is more important than ever that we support the business community,” said Egenton. “This is the only way to generate sustainable, organic revenue growth.”

He echoed concerns about the suggested warehouse tax and community college cuts – as well as the proposed expansion of the sales tax to include services, transactions and digital services; the proposed increase of the realty transfer fee; a reduction in NJEDA grant funding; and more.

“While we were disappointed about the renewal of the Corporate Business Tax last year, despite reassurances that it was going to expire, we are pleased to see the funds collected are being put towards NJ Transit as intended, as opposed to being used to fill budgetary holes,” said Egenton. “The State Chamber is happy to support the expansion of the Angel Investor Tax Credit and the Manufacturing tax credit, which will incentivize companies to establish operations in New Jersey.

“Incentives attract new businesses, however, we should take additional steps to strengthen the existing manufacturing ecosystem. The budget does not indicate if small-medium manufacturers in New Jersey will receive direct support. Funding the New Jersey Manufacturing Extension Program (NJMEP) would allow us to scale critical programs that help businesses navigate industry challenges, adopt new technologies and upskill their workforce.”

‘An unsustainable path’

Egenton closed out his testimony stressing that the biggest threat to the state right now is the future of the economy.

“The state Legislature and administration have been vocal about making New Jersey affordable and competitive,” said Egenton. “A growing economy is the most effective way to address and improve the state’s long-term fiscal challenges.”

A growing economy is the most effective way to address and improve the state’s long-term fiscal challenges.
— Michael Egenton, executive vice president, Government Relations, New Jersey Chamber of Commerce

In his testimony, New Jersey Business & Industry Association Chief Government Affairs Officer Christopher Emigholz expressed disappointment about the proposed budget plan.

“Despite some signs in recent years and before this budget proposal of moving to a healthier and more fiscally responsible state budget that prioritizes investments in innovation, workforce development and infrastructure, the proposed FY26 budget disappointingly continues New Jersey and all its taxpayers on an unsustainable path fueled by tax increases that harm our affordability and competitiveness,” said Emigholz.

He said that the NJBIA appreciates the full pension payment, full school aid payment, the larger surplus and some targeted pro-growth investments.

“But this is now the second proposed budget in a row that includes over $1 billion in new taxes, another budget that increases spending by over $1 billion and the fifth proposed budget in a row that is built on a structural imbalance with appropriations exceeding revenues by at least several hundred million dollars and in most cases billions.”

Just the start

Emigholz stressed the need to have a comprehensive plan and not schizophrenic budgeting “without direction” – echoing the concerns about proposed cuts to the NJMEP and the New Jersey Manufacturing Voucher Program – or NJMVP – initiative while proposing a new tax credit for manufacturers; as well as the administration’s push to ease the housing crisis, but calling for an increase of the realty transfer fee on home sales above $1 million (to 2%) and a 3% fee for home sales more than $2 million.

“Perhaps the most disappointing aspect of the proposed state budget is the lack of a cohesive plan or strategy to implement the policy goals on which the Legislature, governor and business community all seem to largely agree,” said Emigholz. “There almost seems to be a schizophrenic lack of consistency in the policy goals underpinning the budget proposal.”

The marathon hearing was a precursor for what will no doubt be a very intense few months in Trenton as the budget process ratchets up.

The Assembly Budget Committee holds its next public hearing in Trenton March 25; the Senate Budget Committee kicks of its public hearings the next day with a session at the New Jersey Institute of Technology.