As we head into the final two years of Gov. Murphy’s tenure as governor, we must ask: what condition will NJ be in when he leaves office? A new report by the Sweeney Center paints a bleak picture.  All told, it forecasts that Murphy’s last state budget — for FY 2026 — will have a deficit of -$4.6 billion, which will completely wipe out NJ’s “rainy day” fund.  Thanks to the unsustainable trajectory of Murphy’s government spending, the next governor will inherit a budget where revenue falls well short of spending, resulting in a large deficit.  That’s called gubernatorial malpractice.

Here are some data from the report (FY2025 and FY2026 are projections):

• FY2024 (7/1/23-6/30/24): Budget: $54.4 billion; Revenue: $52.8 billion, Deficit: -$1.6 billion
• FY2025:  Budget: $55.4 billion, Revenue: $52.2 billion, Deficit: -$3.2 billion
• FY2026: Budget: $58.6 billion, Revenue: $54 billion, Deficit: -$4.6 billion

That’s a cumulative deficit for the last three Murphy budgets of -$9.4 billion.  The report projects that at this rate, the state’s “rainy day” fund — its surplus set aside to meet emergency budget shortfalls — will be completely emptied by Murphy’s last FY2026 budget.  The bottom line is that Murphy is projected to leave his successor with a -$4.6 billion deficit and no rainy day fund for FY2027.  

Let’s remember that:

• Gov. Christie’s last FY2017 budget was $34.8 billion.  So in six years, Murphy increased the government spending by $19.6 billion, or 56%.
• Under Murphy, the state budget was bolstered by $6.2 billion in federal COVID relief and borrowed another $4 billion in emergency COVID bonds.
• Thanks to all the federal efforts to support the economy during the pandemic and the resulting stock market boom, NJ had record tax revenues for the last two years.

Murphy has been a status quo governor.  He was elected with the support of NJ’s powerful government unions (with the NJEA in the lead) and has governed for their benefit.  He has raised taxes and consistently increased state government spending in accordance with their wishes.

Rather than use the COVID revenue windfalls to do the hard work of reforming NJ’s severely impaired pension system, he opted instead to throw in $25 billion of good money after bad.  Just as the NJEA wanted.  Rather than use the windfalls to put NJ on the path to structurally balanced budgets, he spent all the money propping up the status quo.  Just as the NJEA wanted.  His government union pals win and the rest of NJ loses.  

That’s called gubernatorial malpractice.