New Jersey (STONJ1) Governor Chris Christie’s $32.1 billion spending plan might produce a deficit by the end of next fiscal year if revenue falls short of his targets, the Legislature’s chief finance officer said.
Christie’s fiscal 2013 budget projects a year-end balance of $300 million, or 0.9 percent of expenditures, David Rosen, budget analyst for the nonpartisan Office of Legislative Services, told lawmakers. Revenue may be $392 million less than Christie’s targets as income-tax collections fall short, Rosen predicted.
“A budget that anticipates a surplus of less than 1 percent while relying on revenue forecasts that fall at the higher end of the likely range might raise some concerns,” Rosen told the Assembly Budget Committee today.
Rosen projected total revenue growth of 6.5 percent for fiscal 2013, which starts July 1, while Christie’s plan counts on a 7.3 percent gain, the most since before the recession began in December 2007.
Treasurer Andrew Sidamon-Eristoff said yesterday that Christie’s administration sticks by the higher revenue targets. Bonuses and “non-salary” income will rise during the economic expansion, he said during a Senate Budget Committee hearing.
“Although we are by no means out of the woods, the governor’s budget proposal for fiscal year 2013 reflects the fact that, together, we have begun to stabilize our finances,” the treasurer said. He is scheduled to appear before the Assembly Budget Committee later today.
The Christie administration’s projected 0.9 percent surplus is “low by historical standards for New Jersey,” Rosen said in a report released yesterday. Since 1983, the state’s actual surplus has exceeded 2 percent of the budget in all but three fiscal years, according to the report.
Rosen based his calculation of the state’s year-end balance solely on the difference between his and the administration’s revenue forecasts.
“All other things being equal, the lower OLS revenue estimates would produce a year-end deficit of $236.9 million,” Rosen said in his report.
New Jersey’s constitution requires a state budget that balances revenue and spending. A year-end deficit would force the governor and lawmakers to raise revenue or cut spending to close the gap.
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