Legislature Adopts Fiscal Year 2027 Spending Plan in Last-Minute Votes  

After months of public hearings and deliberations, the Legislature adopted a state budget for fiscal year 2027 on Tuesday, just before the constitutional deadline to pass an annual appropriations act by June 30. Governor Sherrill promptly signed the bill into law Tuesday evening. The enacted budget reflects the $60.7 billion framework – the same total spend of the Governor’s initial budget proposal – jointly announced by the Governor and legislative leaders on June 23.  

 For additional information on the FY2027 budget, please see: 

• Full bill text 

• Note: In signing the budget, the Governor line-item vetoed – or deleted – the language corresponding to DCF’s SPARK program “to maintain consistency with legislative intent as the SPARK program is the subject of separate legislation.” Additional information on that legislation can be found in a separate article in this week’s edition of School Board Notes. 

• Office of Legislative Services’ Score Sheet 

• Office of Legislative Services’ Analysis of Language Changes 

Based on initial review, the budget does not appear to make any changes to the funding amount or distribution of K-12 formula aid. The budget does, however include several changes in education programs from the Governor’s initially-proposed budget. 

No Changes to K-12 Formula Aid  

The budget bill retains the K-12 formula aid amounts and policies reflected in the Governor’s March proposal and March 2026 state aid notices. This includes: 

• $12.4 billion in formula aid – an increase of over $370 million from FY26 

• Maintaining a three percent cap on year-to-year decreases in state aid and a six percent cap on increases  

• Calculating special education aid based on special education enrollment, rather than the census-based method 

• Utilizing multi-year averages for property wealth and income when calculating a district’s local share 

• The budget bill also maintains March’s proposed funding levels for various targeted programs, including 

• $420 million for Extraordinary Special Education Aid 

• $15 million for High-Impact Tutoring 

• Following the schedule established in FY2023, $350 million would be made available to the Schools Development Authority (SDA) for current construction projects, and an additional $50 million in appropriations would support capital grants in SDA districts 

• $3 million for Local Efficiency Achievement Program (LEAP) grants and $1 million for School Regionalization Efficiency (SREP) grants 

Notable changes to education programs include the following: 

Student Mental Health – NJ4S/SPARK 

Perhaps the most significant change from the Governor’s March proposal is in the State’s New Jersey Statewide Student Support Services (NJ4S) student mental health program. In March, the Governor initially proposed sunsetting the Department of Children and Families’ (DCF) NJ4S program – which was funded at $43 million in FY26 – replacing it with a $33 million competitive DOE grant program known as “School-based Partnerships for Access and Resilience for Kids,” or “SPARK”  to support school districts in training and hiring school-based clinical staff focused on delivering Tier 3 mental health services to students with high-acuity needs. Following that proposal, many practitioners and stakeholder organizations – including NJSBA – expressed both appreciation for the enhanced focus on Tier 3 services and the importance of maintaining successful NJ4S programs.  

This proposal became one of the center points of spring budget discussions: in April the Governor signaled that her team was reworking the proposal to help ensure continued support for successful NJ4S programs; the legislature’s Joint Committee on the Public Schools held a hearing on the topic in May; and bills on the subject moved in June.   

The budget bill seems to reflect this feedback by simultaneously continuing NJ4S and investing in a new SPARK program. Specifically, the bill provides DCF a total of $40 million for NJ4S and $8 million for SPARK. The bill also establishes additional enhanced oversight of NJ4S programs by requiring contracted service providers to submit monthly reports to DCF concerning the number of students served, types of services provided, and outcome data.  

Nonpublic Aid Programs 

The budget increases funding for the following nonpublic aid programs: 

• Nonpublic Security Aid: Increases funding by $2 million – from $30.55 million to $32.55 million – and raises the per-pupil amount accordingly, from $205 to $217. 

• Nonpublic STEM Reimbursement Program (P.L.2019, c.256):  The Governor’s initial proposal authorized carryover of unspent FY26 funds into FY27, but did not provide any new funding for the program in FY27. The budget bill retains that carryover authority, but also provides $1.5 million in new funding for the program.  

Preschool Education Aid Uses 

The budget bill authorizes the NJDOE to use preschool expansion funds for a third purpose: grants to districts already receiving PEA to expand their preschool programs through mixed delivery partnerships. The other two purposes – expanding State-funded programs into new districts and preschool workforce expansion initiatives – remain authorized. The bill also imposes a priority ranking in those three authorized uses: (1) expanding into new districts; (2) expanding current programs; and (3) workforce initiatives. 

Miscellaneous 

Other notable, targeted changes include: 

• Additional Funding for School Meals: The budget bill increases funding from $12 million to $15 million for the Department of Agriculture to reimburse districts for the costs of providing additional free school meals based on expanded eligibility requirements under the Working Class Families Anti-Hunger Act.  

• Expanding Clayton Model Pilot Program: Established under P.L.2021, c.85, the Clayton Model Pilot Program was a five-year program supporting participating school districts in implementing a universal, school-based, social emotional learning program for students in grades kindergarten through five to help enhance positive youth development and academic achievement. The 2025-2026 school year was the last year of the pilot. The FY27 budget bill provides an additional $1 million to NJDOE to expand the pilot program. 

• School Lead Filters Program for Filtered Bottle-Filling Stations and Filtered Faucets: The budget bill provides an additional $500,000 to the DOE for School Lead Filters, seemingly to continue the grant program launched in April under P.L.2025, c.76. 

• Mental Health and Capital Improvement Grants: The Legislature also inserted a series of direct grants to individual school districts to support student mental health services or capital projects. 

FY2026 Supplemental Appropriation 

Alongside the FY2027 budget bill, the legislature also approved and the Governor signed  $358.8 million in supplemental appropriations to the FY2026 budget (S-4538). It’s not atypical for the Legislature to add some spending items for the current fiscal years before it expires, while simultaneously passing a new spending plan for the fiscal year beginning July 1. Education-related supplemental FY26 appropriations include: 

• $3.5 million in additional funding for Charter School Facility Improvements 

• Various line items to individual districts for capital and operating expenses 

• $500,000 to the DOE to establish the Educator Employment Web Portal pursuant to P.L.2025, c.208. 

Beyond the State Budget, the legislature has also been busy advancing various education-related bills. A summary of recent activity can be found in a separate article in this week’s edition of School Board Notes.