Trenton, NJ – New Jersey lawmakers have approved the diversion of $190 million from the state’s Clean Energy Fund to close budget shortfalls in the upcoming fiscal year, reigniting criticism from environmental groups and breaking earlier promises to protect the fund.
Under the FY2026 budget, $140 million from the Clean Energy Fund will be directed to NJ Transit for operational costs and bus electrification efforts, while another $50 million will be shifted to the state’s general fund. The move comes amid growing fiscal pressures and shrinking federal aid, as lawmakers scramble to stabilize state finances without new taxes or deep cuts.
The Clean Energy Fund, financed by a small surcharge on utility bills, was established to promote energy efficiency, renewable energy development, and electric vehicle infrastructure. Critics say the latest diversion undermines that mission and delays key clean energy investments.
Environmental advocates noted that this marks the 17th consecutive year the fund has been used for unrelated budget purposes and the second-largest single diversion in state history. According to Inside Climate News, more than $800 million has been transferred out of the fund during Governor Phil Murphy’s tenure — despite his earlier pledge to end such “raids.”
“This isn’t what ratepayers are funding,” said one environmental policy advocate. “Money intended for clean energy programs is being siphoned off to fill budget holes instead of advancing New Jersey’s transition to a cleaner future.”
Murphy and legislative leaders defended the move as a necessary budget measure to sustain public transit and essential operations, pointing to NJ Transit’s mounting deficits and the loss of federal pandemic relief.
Environmental groups including the Sierra Club have called on lawmakers to permanently protect the Clean Energy Fund, warning that continued diversions threaten the state’s climate goals and erode public trust.