New Jersey Gov. Mikie Sherrill’s proposed budget would kick some seniors off a new property tax relief program that she said will save the state hundreds of millions of dollars as the new Democratic governor looks for ways to address a projected $3 billion deficit this year.

Sherrill has pledged not to raise taxes, despite warning of a dire financial conditions if the state keeps its current course. But opponents say her proposed changes to a program designed to keep seniors in-state when they retire would function as a tax increase for some seniors who just received relief.

She touted her budget proposal as the state’s “most fiscally responsible budget our state has seen in years” as she laid out her vision for the next fiscal year, which begins on July 1.

Sherrill’s plan would expand mental health support for students at schools and assist first-time home owners. It would also bring assistance to business owners from underrepresented communities while paring down corporate tax breaks.

The former Navy pilot opened her speech with a moment of silence for service members killed or injured in the Middle East this month. Her budget also includes a proposal to increase housing for homeless veterans.

The Democratic governor will have to find consensus on how to address the budget gap while funding these new proposals through negotiations with the General Assembly and Senate, which are both dominated by her own party, ahead of a June 30 deadline.

“If there are things you think we need to add – come to me with places we can cut,” Sherrill told legislators. “It’s simple math: any additions require subtractions.”

Some seniors would lose property tax relief

Seniors who own homes just started getting checks for a program called Stay NJ that is in effect for the first time this year. The program was designed to discourage seniors from moving out of state by refunding them up to half of their property tax bills up to $6,500.

Critics of the program say it’s expensive for the state and that the eligibility of seniors making below $500,000 is too high. Sherrill agrees.

Standing right in front of Assembly Speaker Craig Coughlin, a Central Jersey Democrat who championed the program, Sherrill said her modification will save taxpayers hundreds of millions of dollars a year.

“That’s a fairer, more efficient use of taxpayer money,” she said.

Her administration wants to slice the eligibility cap in half and only make the program available for seniors with an income below $250,000. The maximum benefit would be $4,000.

Senior renters who make below $150,000 will continue to receive a $250 bonus as part of another property relief program called ANCHOR, but the bonus will not be extended to senior homeowners this year.

Kids would get more support at school amid social media and learning loss

Sherrill wants to fund various initiatives aimed at improving outcomes for kids at school as well as their mental health – issues she spoke about on the campaign trail that she said are personal to her as a mother of four. She said social media is “worse” than Big Tobacco.

“My four kids are between the ages of 14 and 20 years old,” she said. “And I can tell you with certainty: our country is failing our children when it comes to protecting them online.”

She wants to allocate $33 million to a new youth mental health initiative that would expand mental health services in K-12 schools. This money would be directed to students with “high-acuity needs,” or kids facing severe mental health symptoms.

She also wants to dedicate $500,000 to create a new social media research center focused on young people’s mental health and $125,000 for the new Office of Youth Online Mental Health Safety and Awareness, which she created within the Department of Health.

“The truth is, a new platform or feature rolls out every day, with the most advanced algorithms designed to addict us all,” she said. “Trying to keep up with this would be a full-time job, and the platforms know it.”

In an effort to address learning loss from the pandemic, Sherrill wants to allocate $15 million to “high-impact tutoring” that her administration says would help nearly 100 more districts and 13,500 more students.

Her administration says her proposal would also allow her to expand childcare assistance for up to 77,500 kids, which is 2,500 more than this fiscal year.

Sherrill wants to increase funding for schools and work with the legislature to make changes to the school funding formula, which could impact property taxes.

How her budget would impact business owners

Sherrill has championed trying to make state processes easier for business owners trying to navigate its permitting and licensing systems. She wants to accelerate work that’s been underway by the New Jersey Innovation Authority – which uses AI and other digital tools to modernize government agencies and make them more user friendly.

She wants to send $13.3 million to the authority to support modernizing the state permitting system and creating an online “report card” in an effort to increase transparency over how state agencies are spending taxpayer money.

She also wants to reduce business registration fees, and dedicate $500,000 to train business owners from underrepresented groups on navigating the state’s processes.

She also wants to raise revenue by decreasing tax breaks to bigger companies.

Sherrill wants big companies to make up for federal Medicaid cuts

Sherrill said 300,000 New Jerseyans will lose Medicaid because of new regulations under President Donald Trump’s One Big Beautiful Bill Act, which cut social programs to help pay for tax cuts.

The new law requires many Medicaid recipients to file paperwork every six months to show they are complying with a work requirement for the program, which provides low-income Americans with health coverage.

She said her budget will invest in technology to help people meet the new requirements, but directly paying for those losing coverage would cost the state billions, she said. She instead wants companies with 50 or more employees to cover employees on Medicaid or pay a fine, which she projects could raise $145 million.

First-time home owners and veterans facing homelessness

Sherrill, a former Navy helicopter pilot, believes her administration can reach every homeless veteran in the state this year. To reach this goal, she wants to direct $11 million to Bringing Veterans Home, an existing program that addresses veteran homelessness and has helped more than 2,200 homeless veterans since it was created in January 2025.

Her administration wants to spend $25 million to expand programs to address homelessness.

Sherrill also wants to help about 3,000 more first-time and first generation homeowners by increasing funding for the state’s down payment assistance program by $5 million. She also wants to reduce transfers from the Affordable Housing Trust Fund by $70 million.

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