On Tuesday, March 10, 2026, Governor Mikie Sherrill delivered her inaugural budget address to the Legislature. Sherrill’s $60.7 billion proposed FY27 budget includes $12.4 billion in K-12 formula aid – an increase of $372.1 million (3.1 percent) from the current fiscal year. Altogether, including formula aid, Preschool Education Aid, state payments on behalf of school districts, and other forms of school aid, the governor’s proposed FY27 budget would increase pre-K to 12 education aid by 1 percent, to $22.5 billion. Funding for public education accounts for over 35 percent of the total proposed budget.
The New Jersey Department of Education (NJDOE) will release state aid notices pursuant to the proposed budget later this week. The 2026 school district budget calendar – revised to accommodate the later date of the FY27 budget address – may be found on the NJDOE’s School Finance webpage.
As with any budget year, the Legislature still needs to consider and approve a final budget for the governor to sign by June 30. The items included in the proposed budget, listed below, are therefore all subject to legislative approval.
More information on the proposed budget will become available in the coming weeks. The New Jersey School Boards Association will continue to provide updates in School Board Notes and is hosting a webinar with more details for members on Tuesday, March 24 (register here).
Formula Funding Continues Efforts to Enhance Predictability and Reduce Volatility
The proposed FY27 budget includes $12.4 billion in formula aid – an increase of over $370 million from FY26. The governor’s proposal continues efforts to enhance predictability and reduce volatility for school districts, by, for example: 1) maintaining a three percent cap on year-to-year decreases in state aid and a six percent cap on increases; 2) calculating special education aid based on special education enrollment, rather than the census-based method; and 3) utilizing multi-year averages for property wealth and income when calculating a district’s local share. The proposed budget states the administration’s intent to “undertak[e] the important, long-term work of modernizing the current formula to reflect today’s educational needs better and ensure a fair, sustainable approach to school funding in the coming years.”
Increased Preschool Aid
The proposed FY27 budget includes $1.38 billion in Preschool Education Aid, a 9.3 percent increase over FY26. The proposed budget would also make $4.5 million available to support new districts.
New Initiatives
In an attempt to increase funding transparency, the NJDOE will develop user-friendly dashboards and mapping tools on its website that explain the school funding formula and how its allocations change each year.
In the Budget in Brief issued along with the budget message, the Sherrill Administration acknowledges that school districts have “recently experienced and reported fiscal strain due to inflationary pressures and other stressors.” To address this dynamic, the proposed budget also includes increased resources for the NJDOE dedicated to oversight, technical assistance, and early detection of financial distress to help improve district fiscal accountability and support districts navigating financial challenges.
Fulfilling one of her campaign promises, Gov. Sherrill has proposed $125,000 for the Office of Youth Online Mental Health Safety and Awareness, created by Executive Order No. 6. The office will provide research and recommendations on responsible social media use among youth. The proposed budget also includes $500,000 for developing a Social Media Research Center.
Other Initiatives
The proposed budget includes a number of other education-related funding initiatives, including:
- Flat funding for Extraordinary Special Education Aid ($420 million).
- $15 million for high-impact tutoring, doubling the amount from last year. Additionally, the Sherrill Administration “will continue to advance other evidence-based programs through the Department of Education to improve third-grade literacy and bring kids back up to speed.”
- Working-Class Families Anti-Hunger Act funding to provide 21,000 schoolchildren with free school meals.
- School facilities: Following the schedule established in FY2023, $350 million will be made available to the Schools Development Authority (SDA) for current construction projects, and an additional $50 million in appropriations will support capital grants in SDA districts.
- $33 million for the first year of School-based Partnerships for Access and Resilience for Kids (SPARK), a new youth mental health statewide initiative to expand mental health services in K-12 schools and help students with complex, high-acuity needs. SPARK will shift services currently provided through NJ4S, which the Administration plans to sunset, and reinvest those funds into high-acuity services through the NJDOE.
- A $1 million increase in funding for the Local Efficiency Achievement Program (LEAP), bringing total proposed FY27 funding to $3 million. LEAP grants, administered by the NJ Department of Community Affairs, assist local government bodies, including school districts, in exploring and establishing shared services.
For more information on Governor Sherril’s proposed budget, please read the Budget-in-Brief. To view the press release, please click here. The full transcript of her budget speech to the Legislature can be accessed here.
