N.J. Revenue Trails Budget as Christie Touts Comeback
New Jersey receipts from income and corporate taxes fell short of Governor Chris Christie’s budget targets last month and appear to be on pace to trail the same period a year earlier, according to legislative analysts.
Preliminary information indicates collections from both levies fell in April, according to a May 3 memo from the nonpartisan Office of Legislative Services. The e-mail to lawmakers, which was obtained by Bloomberg News, said a detailed figure won’t be available until May 14.
Christie, a first-term Republican, has traveled the state to tout the beginning of a “Jersey Comeback.” His budget forecast an increase in receipts last month compared with April 2011. His proposed spending plan for the year that starts in July counts on rising revenue to help fund a 10 percent tax cut.
“This just fuels that the Jersey Comeback is basically just a myth at this point in time and we need to get past those sound bites,” Assembly Budget Committee Chairman Vincent Prieto said in an interview today. “Is it a substantial number? I don’t know. We need to see the whole big picture.”
Michael Drewniak, a Christie spokesman, said the governor’s office is still reviewing collections for April and the fiscal year to date, and it’s too early to draw conclusions.
“Assemblyman Prieto has no business criticizing our constant and constructive efforts to fix a decade of obsessive overtaxing and overspending by him and his Democratic colleagues,” Drewniak said in an e-mail.
Christie, 49, has pitched his case for the across-the-board rollback in personal income levies in town-hall meetings statewide. The current debate over tax levels is proof that the recovery is stirring, Christie said yesterday during a public forum at a National Guard in Freehold.
“It isn’t happening fast enough,” he said. “We still have too many people out of work, but it’s getting there and we’re making progress and moving in the right direction.”
Treasurer Andrew Sidamon-Eristoff declined to give details or estimated April collections during testimony to lawmakers in Trenton today. The administration will detail the figures early next week in a monthly revenue report, he said.
Prieto, a Secaucus Democrat, said he wasn’t satisfied with Sidamon-Eristoff’s pledge to provide the figures next week. The Treasury Department tracks daily collections and should release the most recent data for April, he said.
April is typically the largest month for income-tax collections because it includes the filing deadline. Sidamon- Eristoff, in an April 16 statement, said revenue for that month would be “key in helping the administration maintain this positive momentum in the fiscal year.”
The current spending plan calls for a balance of $580 million at the end of the fiscal year on June 30, Prieto said. Any drop in revenue could lower the state’s starting balance for next year and make Christie’s tax cuts difficult, he said.
Christie has prodded Democrats who control the Legislature to pass his tax-cut plan. Democrats in both chambers have made counterproposals that focus on giving middle-class residents property-tax credits on their income-tax returns.
Senate President Stephen Sweeney has proposed a 10 percent credit. Assembly Democrats want to give 20 percent credits and fund them partly through a tax increase on those making $1 million or more. Christie has said revenue growth alone will be enough to fund his cuts and that he’ll veto any tax increases.
Christie’s proposed $32.1 billion budget for fiscal 2013 counts on a 7.3 percent gain in revenue, the most for a year since before the last recession began in December 2007.
Standard & Poor’s said in February that Christie’s spending plan relies on “optimistic” revenue assumptions. David Rosen, chief budget analyst for the Legislative Services office, said in March that revenue may trail Christie’s estimates this fiscal year and next as taxes on income and casinos fall short.
In March, collections missed Christie’s budget target by $46.4 million, or 2.5 percent, according to the state Treasury Department. Income taxes lagged behind projections by 6.4 percent, sales levies fell short by 5 percent and collections from corporations trailed by 3.9 percent.
Revenue for the nine months through March came in about $46.4 million, or 0.3 percent, under forecast, according to the department. Receipts from income, sales and business levies each were less than 1 percent short of budget estimates.
“My gut feeling is that the numbers aren’t so bad that we’ll have to make any cuts” to the current budget, said Assemblyman Declan O’Scanlon, the ranking Republican on the budget panel. “We’ll just have to wait and see.”
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