The nonprofit Garden State Initiative released a report March 9 highlighting how Trenton’s legislative earmarks are boosting costs for New Jersey families and businesses, while eroding transparency in state government, one of the issues Gov. Mikie Sherrill addressed in one of six executive orders she issued the day she was inaugurated.
The report, released in advance of Sherrill’s initial budget address on March 10 and authored by New York University finance professor Thad Calabrese, reveals that secretive discretionary spending inserted into the state budget has grown dramatically in recent years to $2.1 billion (fiscal years 2024-26). In fiscal year 2026 alone, the Legislature added $860 million in earmarks, funding not requested by the governor and often approved behind closed doors.
Among the findings of the report are:
- 450% increase in the number of private and nonprofit organizations receiving state funds over just two years, 462 in fiscal year 2026 from 101 in 2024. $240 per household per year is effectively being spent on these “extra” budget items.
- These discretionary expenditures over the last few years could otherwise fund a 4% across-the-board income tax cut, pay down 5% of the state’s massive, bonded debt, or even eliminate income taxes on those making $50,000 or less, for example.
- There is little to no transparency of how funding is generated, reviewed, or approved without standardized data-driven criteria to determine the public need addresses. This increases incentives to maximize political connections to obtain taxpayer resources
“There is a lot of talk about affordability these days, which is more pronounced with a $3 billion budget deficit this year,” said Audrey Lane, president of the Garden State Initiative. “One place for the governor to look is to hold the line on last-minute discretionary spending. Since 2024, the Legislature has added $2.1 billion in politically connected spending without any standard review process, that could otherwise pay down our debt, provide significant tax relief for struggling families and businesses.
“What this report suggests is that the governor and the Legislature can reform this earmark process to increase transparency of this spending well in advance of the budget deadlines to ensure it meets a public need in an objective way.”
The Garden State Initiative also updated NJBUDGET.COM on Monday to reflect new fiscal 2026 data: more than $118 million in supplemental appropriations approved by the Legislature through the passage of Assembly Bill #6319, signed into law by Gov. Phil Murphy on Jan. 20, just prior to leaving office.
GSI said these funds support nearly 20 projects, most of which were not previously funded in the Fiscal 2026 Appropriations Act, and nearly all will be passed through to third parties in the form of state aid and grants-in-aid.
The report underscores that these spending practices reduce fiscal predictability, limit transparency and hinder New Jersey’s business competitiveness.
The report calls for three key reforms:
— Eliminate non-competitive legislative add-ons.
— Redirect earmark funds toward broad-based tax relief or debt reduction.
— Require full transparency and public bidding for any grants to third-party organizations.
Sherrill’s fifth executive order on Jan. 20 focused on reducing permitting delays and costs, boosting accountability in the permitting and regulatory process, and expanding transparency into how taxpayer dollars are spent. The order created the New Jersey Report Card, an interactive online portal that provides information on state-funded programs and what they are delivering for residents and includes an interactive budget analysis tool. Accountability and government transparency was one of the issues she campaigned on.
The Garden State Initiative is a 501(c)(3) nonprofit focused on advancing an alternative voice and common-sense policy solutions that promote investment, job growth, economic opportunity and innovation for all New Jerseyans.
