Murphy signs final budget of tenure

Gov. Phil Murphy signed the final budget of his tenure into law Monday night, a $58.8 billion piece of legislation that he said will further strengthen the state’s fiscal standing and improve affordability. 

In a press release after midnight, the governor’s office said the budget provided the highest level of school funding in history and highlighted that this is the fifth consecutive budget to fully fund the state’s pension system.

“This budget exemplifies our dedication to fiscal responsibility, affordability, and opportunity for all New Jerseyans,” Murphy said in a press release. “Over nearly eight years in office, we have maintained a steadfast commitment to building a stronger and fairer New Jersey and righting our fiscal ship. I’m proud that this budget caps off an eight-year journey to turn our state around and delivers greater economic security and opportunity to every family. With the help of our legislative partners, we are moving New Jersey toward a brighter future for every child, student, worker, parent, and senior citizen who calls our great state home.”

The legislation will leave the state with a $6.7 billion surplus entering the next governor’s term. The budget, which applies to fiscal year 2026, operates at a $1.5 billion structural deficit, meaning spending exceeds revenue.

Monday was the deadline for the governor to sign the budget. If the budget were not signed by July 1, the state government would have shut down. Murphy signed the budget at about 11:42 p.m., one source said.

The budget, which passed largely on party lines in both legislative chambers, faced its usual Republican opposition in the Legislature.

“We are here today, on June 30, voting on a $58.8 billion budget,” Assemblywoman and GOP budget officer Nancy Muñoz said on the floor. “This budget is almost 4% higher than last year’s budget, which outpaces inflation. This is not responsible budgeting.”

Assemblywoman Dawn Fantasia (R-Franklin Borough) criticized the so-called “pork” items included in the bill, like construction and recreation projects that she said are unnecessary.

“I’ve heard lots of words. I’ve heard it’s ‘balanced,’ it’s ‘responsible,’ and we just heard that we should be proud,” Fantasia said. “Well, I’m not proud, I’m angry.”

Republican concerns were not just focused on the contents of the budget, but also on how it came to fruition. The legislative budget committees cleared the budget late Friday night in a process Republicans and stakeholders have called “opaque.” 

“Most legislators in this room received the budget somewhere around Saturday morning, we had two days to read through the 370+ pages, plus the additional 150 bills we read today,” Assemblyman Mike Inganamort (R-Chester Twp) said from the floor. “I feel even worse for the members of the Budget Committee, who got the final budget two hours before voting [Friday night]. That’s two minutes per billion dollars spent.”

State Sen. Paul Sarlo (D-Wood-Ridge), the chair of the Senate Budget Committee, defended the process, saying the committee spent more than 100 hours in public hearings and that the budget does not wildly differ from the governor’s proposal earlier this year.

GOP opposition to Murphy’s budget isn’t necessarily a surprise, but the bill also faced opponents in the form of public-sector unions. The unions objected specifically to a planned $100 million cut to the fund that covers health care for state workers. The specific cuts haven’t been determined — a panel of union and state officials will be tasked to find $100 million in savings from the State Health Benefits Program — but union leaders called the decision a betrayal of workers and a violation of collective bargaining agreements.

“This budget is a betrayal of the very working people who elected him into office,” said Billy Gallagher, the assistant to the vice president of Communication Workers of America District 1. “Budgets are moral documents and this one makes painfully clear where Governor Murphy stands. Gov. Murphy has chosen to gut $100 million in health benefits for public sector workers and retirees.”

Premiums for the State Health Benefits Program are set to rise next year — state officials worry the state insurance program could be headed toward a “death spiral.” State officials also expect premiums to continue rising in the years to come, forcing legislators to try to get ahead of the issue with some cuts. 

Gallagher, in a scathing release with other public-sector union officials, said the Murphy administration refused to pursue a change to the benefits program that they say could save $1.1 billion without harming workers. Gallagher claims the administration didn’t pursue the option because it would have “required renegotiating existing contracts with insurance carriers and Pharmacy Benefits Managers.”

“It’s the height of hypocrisy that Gov. Murphy has no concern about breaking our contract and bypassing collective bargaining with public employees,” he said.

Several Democratic legislators expressed concerns about the cuts. State Sen. Linda Greenstein (D-Plainsboro), for example, said she would vote for the bill but worried the planned cut “does not respect” the collective bargaining process. The senator said she hopes to address the issue with further collaboration, especially as the savings are not yet fully finalized.

Still, just one Democrat voted not to approve the budget: Assemblyman Wayne DeAngelo of Hamilton, who abstained. Himself a union leader, said the “sticking point” was the lack of negotiation between legislators and public workers before the $100 million in cuts were determined.

“That’s a discussion that needs to take place between the two bargaining units,” he told reporters.

Another last-minute concern arose publicly with a statement from Attorney General Matt Platkin, who criticized a decision to send the proceeds of a $45 million opioid settlement to major hospitals in the state. Platkin said the funds should be used to fund programs “to help the people of New Jersey who are struggling with addiction.”

The move sparked demonstrations in the statehouse. A group of demonstrators interrupted the Senate session with chants and a banner that read, “PEOPLE DIED, YOU LIED: Don’t Let Hospitals Steal the Opioid Settlement Fund,” according to a release. In the morning, before legislative sessions started, demonstrators held a “die-in” in a statehouse hallway, where attendees lay on the floor holding tombstones representing programs they fear could suffer because of the diversion of funds.

“The people here protesting are the reason why fewer New Jersey residents are dying from overdoses, and lawmakers are walking all over us. Literally and figuratively,” said Jenna Mellor, the executive director of the New Jersey Harm Reduction Coalition.

Of the $45 million settlement, $10 million will go to Hackensack, $15 million to RWJ Barnabas, $15 million to Cooper, and $5 million to Atlantic Health, according to the budget. While the legislation did not specify how the hospitals could use the funds, a top Democrat said the money can only be used on harm-reduction programs.

“They cannot use that for operating expenses,” Sarlo told reporters. “It has to be used for harm reduction, community-based programs.”

Kevin Walsh, New Jersey’s acting comptroller, criticized a different passage that he said “requires NJ to continue funding the lowest-rated nursing homes.”

Senate President Nicholas Scutari dismissed Platkin’s and Walsh’s concerns outright.

“Did they run for office? Because I must have missed that,” he told reporters. “I think that one of them is the chief law enforcement officer, and the other is more of an auditor. So I don’t think that’s within their purview to do.”