As the price of eggs continues to climb and the stock market swings amid President Donald Trump’s tariff-fueled trade war, concerns about the possibility of a recession grew this week.
And now that the New Jersey Legislature is starting to prepare a budget for fiscal year 2026, more attention than usual will be on that document and what can be done to make sure the state’s finances are in order in the face of a potential economic slowdown…
The actions of the federal government are going to affect what the state can do to prepare as well, said Marc Pfeiffer, assistant director at the Bloustein Local Government Research Center at Rutgers University.
He explained that in addition to taking the market into consideration, the state has to prepare for “significant uncertainty of federal funding and federal programs.”
The state is entering the new budget cycle with a “healthy surplus,” Pfeiffer said.
Pfeiffer also pointed out this is something that every state has to deal with and should be “very cautious in the assumptions they make about new revenues and cautious with the assumptions they make on what they do with federally funded programs.”
In addition to maintaining a strong surplus, Pfeiffer said other budget policies like cutting discretionary funding or discretionary programs also help.
“You’re really looking at risk,” he said. “How you assess your risks and how are you flexible enough to respond to the problems when they really appear.”