Credit: (Rich Hundley III/ NJ Governor's Office)

New Jersey voters have yet to pick the state’s next governor, but attention is already shifting to some of the major fiscal challenges looming for whoever wins the November election.

Republicans on the Senate Budget and Appropriations Committee have been sounding alarms in recent weeks about the health of the state budget, which is operating with a nearly $1.5 billion gap between planned expenditures and revenues.

The GOP lawmakers are suggesting New Jersey’s next governor will have to confront a budget hole that could actually be much larger, citing financial disclosures Gov. Phil Murphy’s administration prepared in advance of a recent state bond sale.

By their estimates, which factor in rising and unfunded costs tied to the newly established Stay NJ property-tax relief program, among other items, Murphy is leaving “an approximately $4 billion budget hole . . . to the next Governor to fix,” the lawmakers wrote in a recent letter to the state treasurer.

Meanwhile, a coalition called For The Many that represents more than 40 labor unions, community organizations and issue-advocacy groups is raising its own set of fiscal concerns in advance of the looming election, which will see voters choose the next governor and determine which party controls a key state legislative body.

At issue for the For The Many coalition is the ways new federal budget policies enacted earlier this year by President Donald Trump and the Republican Congress could strain the state’s ability to fund critical services like health care and food assistance.

And rather than wait for a new governor to take office, the For The Many coalition is urging Murphy and lawmakers to take action to address these concerns during the upcoming lame duck session of the Legislature that begins after the Nov. 4 election.

On the coalition’s wish list, according to a recent letter sent to Murphy and lawmakers by the group’s members, are new policies that would close corporate-tax loopholes and hike taxes on “super millionaires,” who they define as those earning more than $2 million annually.

“The wealthy and well-connected got the biggest handouts from Washington,” said For The Many coalition manager Eric Benson.

“Now it’s time for them to pay their fair share so we can protect the healthcare, housing, and services our communities need,” Benson said.

Earlier this year, Murphy and fellow Democrats who control the Legislature enacted a nearly $60 billion annual budget that hiked taxes by more than $600 million as part of efforts to close a wide gap between projected annual expenditures and revenues.

Despite the adoption of the tax hikes, which raised levies on packs of cigarettes and high-dollar real-estate sales, among other items, a nearly $1.5 billion gap between projected revenues and expenditures remains in the state’s fiscal year 2026 budget, according to Department of the Treasury budget documents.

The Murphy administration’s recent financial disclosures outlined the plan to drain approximately $1.5 billion in surplus under the 2026 fiscal year spending plan enacted by the governor and lawmakers in late June. Once carried out, that drawdown will leave a surplus of approximately $6.7 billion to the next governor, according to budget documents.

However, the official bond documents also note some $800 million in nonrecurring sources of revenue commonly referred to as “one shots” are also propping up the fiscal year 2026 spending plan.

And the bond documents go on to detail the increased spending the newly established Stay NJ property-tax relief initiative will require if the next governor chooses to renew it for another year.

While Murphy and lawmakers had been setting aside funding for the last several fiscal years to launch the relief program in advance of this year’s elections, there’s no money earmarked to fund Stay NJ benefits promised to a group of senior homeowners making up to $500,000 annually beyond the first half of next year, according to the bond documents.

Looking ahead to the 2027 fiscal year, which begins July 1, 2026, the annual cost of the Stay NJ program is also due to increase, from $600 million to over $1 billion.

“In Fiscal Year 2027, when the Stay NJ program is expected to operate for the entire fiscal year, it is projected appropriations in the approximate amount of $1.2 billion will be necessary in Fiscal Year 2027 to fully fund the program,” according to the bond documents.

“There can be no assurance that the Legislature will fully fund the program in Fiscal Year 2027,” the bond documents go on to say.

Both Republican Jack Ciattarelli and Democrat Mikie Sherrill, the two major-party candidates vying to replace the term-limited Murphy this year, have proposed ways to ease the burden of New Jersey’s record-high property-tax bills.

But with control of the 80-member state Assembly also up for grabs on Nov. 4, majority Democrats have been heavily promoting the Stay NJ program as a signature accomplishment as they contend with voters’ concerns about New Jersey’s steep cost of living, including high taxes.

Democrats have controlled both the Assembly and Senate for more than two decades. The Democratic Murphy has also held the governorship since early 2018, but he could not seek reelection this year due to the term limits in the state Constitution.

In the face of the voter concerns about taxes and affordability, the For The Many coalition is arguing the state’s wealthiest residents and big corporations should be contributing more. The group argues the federal policy changes enacted over the summer have largely benefitted only businesses and the very rich.

While New Jersey currently levies a 10.75% income-tax rate on an individual’s earnings over $1 million, the coalition calls for new and higher income-tax rates on earnings over $2 million, $5 million and $10 million.

Set at 12%, 13% and 14%, respectively, these proposed tax rates could generate more than $1 billion in new revenue for the state budget, all while impacting less than 1% of New Jersey’s taxpayers, according to the coalition.

“Now is the time for New Jersey to make sure families get the protection and support they need here at home,” according to the coalition’s letter to Murphy and lawmakers.

“Every delay means higher costs for families, deeper holes in the state budget, more hospitals on the brink of closure, and fewer tools left to prevent long-term harm,” the letter said.