Jan. 3 (Bloomberg) -- New Jersey’s revenue may be as much as $700 million short of plan through the end of this fiscal year and the gap could grow to as much as $2 billion, the legislature’s chief budget officer said.
Tax receipts were $250 million lower than Governor Chris Christie’s forecast in the final two months of fiscal 2012, David Rosen said today at a Senate Budget Committee hearing. That shortfall, part of a full-year deficit for the period ended June 30, widened the current gap to as much as $700 million, he said.
“The state would need a spectacular revenue acceleration to hit the executive’s budget targets,” Rosen said.
All 14 revenue sources tracked by Rosen, who works for the nonpartisan Office of Legislative Services, have fallen short year to date. The impact of Hurricane Sandy on revenue appears to be “minor,” at about $70 million, mostly from Atlantic City’s casinos, he said.
New Jersey’s revenue trailed Christie’s expectations by $451.2 million, or 5.6 percent, in the first five months of the current fiscal year, the Treasury Department said Dec. 21. In November, receipts fell 11 percent below the governor’s goals as Sandy deterred shoppers and gamblers.
In a memo to lawmakers last month, Rosen said that revenue would need to climb 12 percent for the rest of the fiscal year to meet Christie’s budget. That gap could grow to as much as $2 billion if revenue remains flat, Rosen said, though he said he wasn’t predicting that it will.
The governor has been critical of Rosen and his forecasts, calling him a “handmaiden” for Democrats who control the Senate and Assembly. Last year, he called him the “Dr. Kevorkian” of budget estimates, referring to the late pathologist who advocated assisted suicide.
Christie, 50, a first-term Republican who plans to seek re-election in November, in June signed a $31.7 billion spending plan that counted on a 7.4 percent increase in revenue. Through Nov. 30, revenue growth is 0.2 percent, according to Treasury figures.
After Christie outlined his spending plan in February, Standard & Poor’s said it relied on “optimistic” projections and increased the use of one-time revenue sources. Christie’s budget was the largest proposed by a New Jersey governor in five years.
The governor said Dec. 21 that his administration is evaluating the need for mid-year budget cuts. Michael Drewniak, a spokesman for Christie, said in an e-mail that “there are far too many unknowns as our state begins to recover to jump to any conclusions that the sky is tumbling down on us or engage the Democrats’ desire in making this a partisan game.”
Senator Joseph Pennacchio, a Republican from Montville on the budget panel, said in a statement that the hearing was a political show designed to attack Christie as he gears up to seek a second term. The state has enough money in its rainy day fund and reserves to cover the shortfall, he said.
“Governor Christie has always delivered a constitutional, balanced budget,” Pennacchio said. “This committee shouldn’t be used for political games that waste time and public resources.”
Treasurer Andrew Sidamon-Eristoff declined an invitation to testify at the hearing, according to committee Chairman Paul Sarlo of Wood-Ridge. Andrew Pratt, a spokesman for the treasurer, didn’t’ immediately return e-mails seeking comment on Rosen’s testimony.
“It’s extraordinarily unlikely” revenue will increase enough to offset the gap, Rosen told the panel. “Nothing in the state or national economic picture suggests that such growth is likely.”
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