The Senate Budget and Appropriations Committee and the Assembly Budget Committee are scheduled to meet on Thursday to finalize decisions on the FY2026 budget. Each chamber will likely schedule a final vote on the FY2026 budget on Monday.
According to published reports, Governor Murphy and Assembly Speaker Craig Coughlin overcame an impasse on the revenue in the $58.1 billion budget, both agreeing to task those in charge of public worker benefits plans to find $100 million in savings.
Governor Murphy originally proposed levying sales tax on items including, but not limited to, bowling alleys, batting cages, laser tag, mini golf, and more. It is likely, however, that out of the proposed “fun” taxes only cigarettes, e-cigarettes, and sports betting will increase. Cigarettes are slated to increase by $0.30, bringing those taxes to $3 per pack. Also, a 20% increase on the tax casinos pay on revenue from sports betting is suggested. Additionally, an increase in realty transfer fees is likely for homes over $1 million, going from 1% to 2% and homes over $2 million to 3%.
The budget will include a $6 million surplus, and, to the League’s knowledge, no further changes were made to Energy Tax Receipts and Consolidated Municipal Property Tax Relief Aid (CMPTRA). The proposed FY2026 budget recommends an appropriation of $649.3 million for CMPTRA and $805.6 million ETR. As in past years, the proposed CMPTRA appropriation remains flat and is transferred to ETR to avoid the “poison pill” provision of ETR. As a result, no municipalities will receive CMPTRA and there is no increase in ETR from the FY2025 budget.
Public comments by Senate Budget and Appropriations Chairman Paul Sarlo indicate that the legislature may have to return in the fall depending on the final results of the federal One Big Beautiful Bill and proposed cuts that could cost the state billions of dollars.
This situation is fluid and likely to change. We will report accordingly as details warrant.
Contact: Erin Knoedler, Legislative Analyst, eknoedler@njlm.org, x116.