New Jersey had 33 percent fewer residents who earned at least $1 million of annual income in 2009 than in 2007, the Legislature’s chief fiscal officer said.
The state’s wealthiest residents reported 43 percent less income over that period, David Rosen, budget analyst for the nonpartisan Office of Legislative Services, told lawmakers today. Losses in the stock market were the primary driver of the decrease, he said. The Standard & Poor’s 500 Index fell almost 24 percent from the end of 2007 through December 2009.
“It’s purely driven by the economy,” Rosen told the Senate Budget Committee today. “We knew that the wealthiest one-half of 1 percent who pay about one-third of the income tax were important, but we hadn’t anticipated that their fortunes would account for more than three-quarters of the revenue decline.”
Those earning $1 million or more and filing tax returns in the state fell to 11,900 from 17,900 during the two-year period, he said. Rosen said the decline in tax-collections from this group wasn’t because of migration.
Rosen has projected revenue will be $914 million more through June 2012 than targets contained in Governor Chris Christie’s $29.4 billion budget. The governor’s administration projects a smaller $511 million increase from previous targets made in February.
The revision shows the state is on a stronger footing as he seeks to curb spending and trim government payrolls at the state and local levels, said Christie, speaking at a town-hall meeting in Monroe Township. The governor, a Republican, said he plans to divide the $511 million equally between pension and property tax rebates.
“The debate we’re having now in Trenton is how much better the budget situation is -- not whether it’s better but by how much,” said Christie. “I don’t hear the folks who were criticizing my first 16 months say what they should be saying -- that we were right.”
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