With less than a month to go before the finalization of the FY26 State Budget, the focus for many is how much of the $1.2 billion in new and expanded taxes in Gov. Phil Murphy’s proposal sticks.
But NJBIA Chief Government Affairs Officer Christopher Emigholz said a bright light also needs to be turned to restoring funding in two key workforce areas that took a big hit in the initial proposal – manufacturing and higher education.
“This is crunch time for our county colleges and our manufacturing industry,” Emigholz said. “When we talk about education, workforce development and giving residents a chance to earn good paying jobs that hopefully keeps them in the state, these are funds that are desperately needed.
“The good news is most of the lawmakers we’ve spoken to on both sides of the aisle seem to understand the importance of restoring this funding in the final budget. But at the same time, this is also a challenging budget to balance.
“At the end of the day, we need to ensure Governor Murphy and the Legislature realize that shorting community colleges and manufacturing will have long-term reverberations on our overall economy.”
THE COLLEGE TRY
The governor’s proposed FY26 budget calls for a cut of $20 million, or 12%, in operating aid for New Jersey community colleges.
There are also proposed cuts that scale back New Jersey’s commitment to free or reduced tuition for low- and moderate-income community college students, with an 18% cut to the Community College Opportunity Grant, and a 50% cut to the small, but important Student Success Incentive Funding.
In response to the proposed cuts, New Jersey Council of County Colleges President Aaron Fichtner said the state’s 18 community colleges serve as a foundation for everywhere the state wants to grow – namely innovation and entrepreneurship, healthcare, renewable energy, biotech, pharmaceuticals, fintech, and film and television.
“The workforce that our state’s entrepreneurs, innovators, and businesses rely on for their success in these and other sectors runs through our state’s 18 community colleges, which power the state’s economy and provide lifechanging education and career pathways to 240,000 students of all ages and backgrounds every year,” Fichtner said.
“Governor Murphy also said we need to ‘seize on this economic momentum and create a new generation of economic opportunities for everyone.’ We couldn’t agree more. And no institutions in New Jersey provide more opportunities than our state’s community colleges,” Fichtner added.
Emigholz said such cuts to county colleges would also make New Jersey less competitive as states like New York, Massachusetts, Illinois, and California are greatly increasing their investments.
“We cannot understand the importance these schools serve for our young residents as they choose their direction in the world,” Emigholz said. “They provide opportunities for those who may not be able to afford a four-year college, or those who are still deciding their path. And New Jersey is blessed to have such strong community colleges to find a pathway to success.
“But at the same time, these schools cost more and more to operate, especially when you’re looking at increases in healthcare costs, energy costs and service costs to run a quality campus. These schools need to be able to compensate their faculty, adjunct professors and staff to give the students the tools they need to succeed.
“It really is critical that this funding is restored in the final budget,” Emigholz said.
TRENTON TAKES
New Jersey manufacturing also takes a hit in the proposed FY26 budget.
The spending plan eliminates a $2 million line-item for the New Jersey Manufacturing Extension Program (NJMEP) and $10 million budget line-item for NJEDA’s wildly successful Manufacturing Voucher Program (MVP).
While NJMEP President and CEO Peter Connolly has expressed cautious optimism that the state funding will return in the final budget, it’s still very much a time of anxiety for the organization as federal funding for all MEPs has been on the chopping block for next year under President Donald Trump.
MEP centers are a public-private partnership network that provides small and medium-sized manufacturers with tools, training, and expertise to improve processes, increase capacity, and bolster their workforce.
Since 2019, NJMEP has helped to achieve the following:
- 20,278 jobs created or retained
- A massive $1.42 billion in wage impact
- $130.03 in economic impact for every $1 invested
- More than $515.6 million in new sales supported, $1.46 billion in retained sales, and $125.9 million in cost savings to small-medium manufacturers
“This is going to sound like home cooking, but it really is truth – the NJMEP is one of the best and most impactful of its kind in the nation,” Emigholz said. “It’s important that the funding comes back.”
The zeroing of NJEDA’s $10 million for the Manufacturing Voucher Program, which has successfully provided manufacturing investment in capital equipment over the past two years, is another blow for the industry in New Jersey, Emigholz said.
The good news for New Jersey manufacturing, Emigholz said, is Murphy’s proposed budget also has a new manufacturing tax credit proposal to incentivize next-generation manufacturers from around the world to come to New Jersey.
But the funding cuts still does not send a good message to the industry.
“If the Governor and Legislature are serious about supporting manufacturing and innovation, the funding for these two manufacturing line items should be restored to complement the proposed tax credit and not offset it,” Emigholz said.
