As New Jersey lawmakers begin preparing the state budget for fiscal year 2026, concerns about a potential recession are influencing their approach. The rising cost of eggs and fluctuating stock markets amid President Donald Trump's tariff-related trade war have heightened these fears.
Marc Pfeiffer, assistant director at the Bloustein Local Government Research Center at Rutgers University, emphasized that federal government actions will impact how New Jersey can prepare. He noted the importance of accounting for "significant uncertainty of federal funding and federal programs."
Despite these challenges, Pfeiffer highlighted that New Jersey is entering the new budget cycle with a "healthy surplus." However, he advised caution in making assumptions about new revenues and federally funded programs. "Every state has to deal with this," he stated, urging states to be "very cautious" in their financial planning.
Pfeiffer suggested maintaining a strong surplus and considering cuts to discretionary funding or programs as prudent budget policies. "You're really looking at risk," he explained. "How you assess your risks and how are you flexible enough to respond to the problems when they really appear."
