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After heated political campaign, Sherrill faces tough budget realities as NJ governor
By
Mike Hayes
Published Nov 11, 2025
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Eduardo Munoz Alvarez/Getty Images
By
Mike Hayes
Published Nov 11, 2025
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Mikie Sherrill’s victory in last week’s election for New Jersey governor defied all pollsters.
The most generous survey of voters gave her a 6- to 8-point lead in the final weeks of the race. But she won by 13 points, turned five counties from red to blue and eviscerated the gains that President Donald Trump made for Republicans in 2014 with Black and Latino voters. She even beat her Republican opponent, Jack Ciattarelli, in his own hometown.
Now comes the hard part: governing in a state that faces a truly unique set of fiscal and budget challenges.
New Jersey is running a structural budget deficit. The state currently spends about $2 billion more than it brings in in tax revenue. The state could typically count on the federal government to help cover the shortfall and balance the budget. But the Trump administration has already started withholding hundreds of millions of dollars in state aid. And with the Medicaid cuts in the president’s Big Beautiful Bill alone, that number is expected to surpass $3 billion.
“Help [from Washington] is not going to be there anymore,” said Dan Cassino, professor of government and politics at Fairleigh Dickinson University.
He said Sherrill will likely have to raise taxes while cutting services to deal with the state’s fiscal realities, which he said “is going to upset people.”
“It is a poison chalice. I am not sure why anybody wants to do this job,” Cassino said.
Sherrill’s transition team did not immediately respond to a request for comment about the prospect of tax hikes and service cuts.
But the day after her victory, Sherrill told the press that voters have given her a “big” mandate to deliver on her campaign’s affordability message. She’s promised to put a stop to rising electric bills, build more affordable housing and lower day-to-day living costs like groceries and other expenses.
Great power, great responsibility
The governor of New Jersey is among the most powerful top state executives in the country. Unlike other states that hold separate elections for posts like state attorney general, Sherill will appoint her own people for that and other statewide jobs.
She’ll also wield considerable influence over the budget process that will begin soon after she takes office at the beginning of the year. The governor customarily puts forth a budget proposal in February. After the legislature passes its own version in June, Sherill will have the power to take a red pen to any appropriation bills she doesn’t like.
“It gives the governor a lot of opportunity to define the priorities of the state — and not all governors get to do that,” said Kristopher Shields, director of the Rutgers University Eagleton Center on the American Governor.
But with great power comes great responsibility.
After signing his final budget this past June, Gov. Murphy faced criticism — including from Democratic allies — that he did not rein in state spending enough to deal with the ominous cut in federal Medicaid subsidies on the horizon. These criticisms came despite Murphy securing a full $7.2 billion payment for the state’s pension fund for public workers, a record $12 billion for public schools, and increased property tax relief.
“All eyes fall to the governor to solve every state problem,” said Micah Rasmussen, director of the Rebovich Institute for New Jersey Politics at Rider University. “No sooner do you tamp down one issue than there's five other issues that are flaring up.”
Tackling NJ’s 'intractable' affordability problem
With her win, Sherrill bucked a 60-year trend where neither party had successfully won a third consecutive term as governor.
“In New Jersey, we have this weird pattern. We go back and forth from Republican governors and Democratic governors,” Cassino said. “The reason is that the problems we have in New Jersey are largely intractable.”
One of those problems: New Jersey is a “high taxes, high services” state, Cassino said. Many people would like taxes to go down, but they don’t want to lose the services they enjoy. Similarly, lots of people want housing to be more affordable so their kids can buy a home nearby, but they don’t want to see the value of their home shrink in the process.
“ These problems are difficult and perhaps impossible to fix,” Cassino said.
So far, Sherrill has not divulged many of the details of her affordability policies. For example, she’s yet to explain exactly how her signature campaign proposal of declaring a state of emergency to freeze energy price hikes will work in practice. It’s still unclear whether the governor has the authority to freeze rates.
“One of the first things that she'll have to do is put some meat on those bones,” said Matt Hale, associate politics professor at Seton Hall University.
In some cases, this will require a rethink of the spending approach that the Murphy administration has taken over the last eight years. For example, as Hale notes, devising a plan to continue adding more renewable energy to the state will now have to account for the Trump administration’s gutting of clean energy incentives.
“It’s only going to get more difficult as the federal government is restricting aid and subsidies for renewable sources,” he said.
Thanks to this year’s blue wave and similarly impressive performances by Democratic candidates for state Assembly, the incoming governor's party will have a supermajority in the lower house of the state Legislature — at least 55 seats to 25, possibly more as the vote-counting continues — when she’s sworn in on Jan. 1. That will pair nicely with the 25-15 Democratic advantage in the state Senate.
Despite that huge political advantage, Hale agreed with other experts that New Jersey and Sherrill are “in for some tough times.”
“Whether that's battling the federal government or whether it's decreased revenues from [Trump]. I think it could be a pretty set of lean years,” he said.
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Mike Hayes
Mike Hayes covers equity and access to opportunity in New Jersey. He joined WNYC and Gothamist in 2023. Before that, he worked as a freelance journalist writing about policing and criminal justice. He has written for ProPublica, CNN, HuffPost, BuzzFeed News and The Appeal. He is also the author of the book, “The Secret Files: Bill De Blasio, The NYPD, and the Broken Promises of Police Reform.” In 2019, he was a finalist for the Livingston Award for Young Journalists.
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