Governor Sherrill Signs Record $60.74 Billion State Budget

Our state has a new budget, and it's the largest in New Jersey history. Gov. Mikie Sherrill signed a record $60.74 billion spending plan on June 30, marking her first budget since taking office in January. The 2027 budget closely mirrors what the governor originally proposed to lawmakers back in March — a fact Sherrill highlighted as a win for her administration's priorities.

"When I took office, I promised New Jersey families that affordability would be the North Star of every decision we made. With the passage of our first budget, we are delivering on that promise," she said.

The budget tackles several key areas that directly affect our community, from property tax relief to healthcare coverage. But like most government spending plans, it required compromises that pushed total spending higher than recurring revenues can support.

Property Tax Relief Gets Restructured

One significant change for Cape May County homeowners involves the Stay NJ program. The income eligibility threshold has been dramatically reduced from $500,000 to $200,000. The restructured program now includes a means test that establishes different tiers for maximum benefit payments based on household income.

According to census data, roughly 19% of Cape May County households earn above $200,000 annually — meaning they'll no longer qualify for this property tax relief program under the new rules. For the remaining 81% of county households, the program remains available, though the tiered benefit structure means assistance levels will vary.

Education and Healthcare Funding

The budget adds $12 billion in year-over-year aid for public education statewide. However, lawmakers stopped short of addressing broader concerns with the state's funding formula. This means that even as the total pool of state education aid grows, some individual school districts will actually receive less funding than before.

On the healthcare front, the budget allocates just over $7 billion to Medicaid programs while projecting a $267 million decline in Medicaid expenses. These programs remain underfunded given substantial cuts in federal support. In Cape May County, 16% of the permanent population is enrolled in the state's NJ FamilyCare program, with 31% of children under age 18 covered by the program.

Local Impact on Municipal Health Plans

The budget doesn't address spiraling costs of state health insurance programs at the local level — an issue that's driven several Cape May County municipalities to seek private alternatives. As of June, only five county towns remain in the state health plan: Dennis Township, Stone Harbor, West Wildwood, West Cape May and Woodbine.

Employee benefits, pensions and retirement contributions account for more than $5 billion of state spending — roughly 9% of the total budget. The spending plan fully funds the state's pension plans and adds to the state's reserves, addressing long-term fiscal stability concerns.

The Add-On Controversy

When Sherrill took office, she promised to eliminate legislative add-ons — last-minute spending directed toward pet projects in lawmakers' home districts. During her March budget address, she explicitly warned legislators against these "Christmas tree items" that inflate spending.

While the actual budget document stayed true to the governor's original submission, lawmakers found a workaround. They funded district projects through a separate $358.8 million supplemental spending bill, with $290 million designated for district spending. Technically, this supplemental spending will be charged to the 2026 budget year, but since the bill passed with only hours remaining in the fiscal year, much of the money will actually be disbursed in the new year.

Even without these legislative add-ons counted in the main budget, the spending plan allocates roughly $1.4 billion more than the state takes in through recurring revenues — a structural deficit that continues to challenge New Jersey's long-term fiscal health.