Credit: (AP Photo/Matt Rourke)

State government spending will soar above $58 billion when the current fiscal year closes at the end of June thanks to dozens of budget add-ons for things that include farmland and open space preservation and college tuition grants.

According to a list of fiscal year 2025 supplemental spending obtained by NJ Spotlight News through a public-records request, the allocations also include, among other items, additional spending on property-tax relief programs, state aid for public schools and funding needed to keep state highways free of snow and ice in recent months.

In all, the supplemental spending is adding more than $1.4 billion to what was then a record-high $56.7 billion annual budget approved by Gov. Phil Murphy and state lawmakers last June.

As a result, overall state spending during the current fiscal year will now total $58.1 billion, according to budget documents.

Such fine-tuning of the state budget occurs routinely each year, with updates typically coming from the executive branch in late February, and again in May. Last year, supplemental spending added more than $1.6 billion to the original fiscal year 2024 budget, according to budget documents.

Where the additional money is going

Last month, Murphy’s administration disclosed the total amount of supplemental spending now planned for fiscal year 2025 — $1.438 billion. But the full list of supplemental spending items was not made public by the administration at the time.

Income tax is projected to generate more than $20 billion by the time this fiscal year closes, according to the updated projections.

Among the many items included on the list of added spending obtained through the public-records request are: $334 million for the Torts Claims Liability Fund; $255.8 million for farmland preservation; $250.2 million for open space preservation; $80 million for Department of Transportation winter operations; $79.8 million for the Anchor property-tax relief program; $50 million for developmental disabilities community programs; $44.7 million for stabilized school budget aid; $28 million for college tuition aid grants; $20 million for summer tuition aid grants, and $10 million for Department of Law and Public Safety Division of Law legal fees.

In addition to adjusting planned expenditures for the current fiscal year, the administration last month also changed its overall tax-collection forecast.

Extra revenue

As a result, more than $360 million was added to the expected bottom line, pushing the grand total for annual revenue collections expected to occur through the end of June to $54.9 billion.

Leading the way was the income tax, which is now projected to generate more than $20 billion by the time this fiscal year closes, according to the updated projections.

If the revised income-tax forecast holds through the always crucial April tax season, that would represent a more than 7% improvement over the final income-tax totals from the fiscal year that ended in June 2024.

Among the other major sources of revenue for the annual budget, the forecast for overall sales-tax collections was reduced slightly by the administration last month, but the projection for the corporation business tax was increased.

Looking ahead, overall state spending would decline slightly during the fiscal year that begins July 1 when measured against the revised total for fiscal year 2025, dropping from $58.1 billion to $58.05 billion, according to budget documents.

New taxes?

In all, the Murphy administration is projecting total revenues will grow to $56.8 billion during the next fiscal year, a sum that includes more than $1 billion that would be generated from a series of tax hikes Murphy incorporated into his fiscal year 2026 budget plan.

However, even with the proposed tax hikes, which require legislative approval, the governor’s proposed budget leaves a more than $1 billion gap between projected annual expenditures and revenues, according to budget documents.

Earlier this week, NJ Spotlight News reported roughly 3% of Murphy’s overall budget for the fiscal year that begins July 1 would be backed by nonrecurring revenue sources commonly referred to as one-shots.

A series of public hearings on the governor’s proposed budget began this week and will continue next week.

This would include taking nearly $1.5 billion from general budget reserves to cover annual spending in the next fiscal year, according to new estimates obtained through a public-records request.

Another $250 million would also be transferred from the state’s dedicated debt-relief reserve to cover annual spending, according to the new estimates.

The spending bill for the current fiscal year approved by Murphy and lawmakers last June relied on nonrecurring sources of revenue to back more than 7% of planned annual spending.

It’s now up to state lawmakers to decide what to do with the governor’s budget plan for fiscal year 2026, including the proposed tax hikes.

A series of public hearings on the governor’s proposed budget began this week and will continue next week.

Under the state Constitution, lawmakers have until July 1 to determine whether they will codify Murphy’s budget plan or draft their own appropriations bill incorporating some or many of the governor’s recommendations, as well as their own priorities.