TRENTON, N.J. – State Senator Doug Steinhardt (R-23) is calling on Governor Phil Murphy to reinstate formula-based municipal aid in the upcoming fiscal year 2026 budget, after the current state budget eliminated $150 million in funding.
In a letter sent to the governor, Steinhardt criticized the reallocation of income tax revenue to specific capital projects rather than distributing it through a standardized formula. He argued that the cuts would force local governments to raise property taxes or reduce services.
“In my own legislative district, every municipality loses aid from the $150 million cut,” Steinhardt wrote. He cited specific losses, including $615,553 for Bridgewater Township, $305,736 for Blairstown Township, and $209,219 for Phillipsburg.
The senator also pointed to Newark, which received a state loan to cover its share of the cuts, questioning whether the city would ever repay the funds. He urged Murphy to restore “fairness” in the upcoming budget by ensuring all income tax revenue is allocated based on a reasonable and consistent formula.
The loss of municipal aid, coupled with rising inflation and a recent 16% increase in state-run health insurance premiums, would place additional financial strain on communities, Steinhardt warned.