NJ's $56.6 billion budget signed into law by Murphy. Here's what it pays for

A $56.6 billion spending plan for New Jersey that puts in place a new tax to fund NJ Transit, makes a full pension payment and covers the state's school funding formula was signed by Gov. Phil Murphy on Friday evening, even though he acknowledged the 2025 fiscal budget contains a structural deficit.

“We’re coming out of a pandemic so we are deliberately trying to put chum in the water to grow this economy and get it on a higher trajectory,” he said late on Friday. “This is not just about what we do with our expenses but also the excitement I think we all share in the future of the state, so stay tuned on that front.”

Murphy, while addressing the deficit built into the budget, said he is thinking more long-term about those issues but did not provide details as to how that problem would be addressed.

The spending plan was passed by both chambers of the Legislature on Friday afternoon.

Lawmakers voted largely along party lines with three Republicans in the Assembly and two in the Senate joining their Democratic colleagues to approve the bill.

State Sen. Paul Sarlo, the chairman of the chamber’s budget committee, said, “no budget is perfect and every budget is hard.”

He went on to thank his committee members as well as legislative staffers for their work during the process.

But state Sen. Declan O’Scanlon, the Republican budget officer, said that saying “’we’ve done the best we could’ simply doesn’t cut it” and that “we know we could have done better.

“We were awash with federal money…. But we squandered virtually every penny,” he said. “We did nothing but dig the hole deeper and leave our kids and the next governor with a looming fiscal nightmare.”

The process hasn’t been without controversy. Chaos during the last week of June has become part of the budget tradition in New Jersey and the budget bill was voted on in committee about an hour after the 373-page document was finalized. It was not to be made available to the public until the next day.

State Sen. Michael Testa spoke on the floor about the lack of transparency in the process overall. He noted that there were about 50 line items in Murphy’s proposed budget that had little or no explanation, and even during months of committee hearings with department heads, little new information came to light.

He said that wasn’t the end of the line items, though, and that about 400 new ones are in the final budget.

“There is funding for 400 items that include about 100 municipalities, 10 counties and 35 school districts, all outside of any fair and balanced process while school aid and municipal aid is being cut,” he said.

The $56.6 billion budget is an increase of about $728 million over the governor's proposal from earlier this year and $2.3 billion more than the fiscal year 2024 budget. Revenue projections indicate that the state will earn about $54.5 billion in the new fiscal year, meaning the budget functions at a deficit of $2.1 billion. Projects show a surplus of about $6.1 billion.

Related: Are NJ Transit fares going up? Here's what you need to know

Corporate tax to fund NJ Transit

The budget includes the new corporate transit fee, which will implement a 2.5% tax on businesses in the state earning more than $10 million. The new fee runs for five years and would provide funding for New Jersey Transit.

NJ Pension and school funding

The budget also provides full funding for the pension system and the school funding formula as well.

ANCHOR, StayNJ and Senior Freeze

Programs including ANCHOR, StayNJ and Senior Freeze will be funded in the new fiscal year, though payouts for StayNJ are not scheduled to start until 2026.

In its third year, ANCHOR will provide payouts to about 2 million residents in the state ― with nearly 1.3 million homeowners receiving up to $1,750 and more than 700,000 renters getting up to $700.

Though the new budget didn’t meet the benchmarks spelled out in legislation last year, StayNJ is still receiving $220 million because budget language will allow for a workaround.

World Cup is coming

This budget includes $30 million for the New Jersey Sports and Exposition Authority to be used for “International Events, Improvements and Attraction.” This isn’t the first time the authority has received that much money, and in the past it has been used to prepare for the 2026 FIFA World Cup. That tournament is expected to draw millions of tourists to the region in June and July of 2026. Eight World Cup games, including the final, will be played at MetLife Stadium in East Rutherford.

This article originally appeared on NorthJersey.com: NJ 2025 state budget passes, signed into law by Phil Murphy