New Jersey’s revenue must increase 10 percent over the rest of this fiscal year in order to meet Governor Chris Christie’s budget target, according to the legislature’s chief fiscal analyst.
The state may miss revenue projections by as much as $302 million in the current budget and $335 million in the fiscal year that begins July 1, David Rosen of the nonpartisan Office of Legislative Services told lawmakers today in Trenton. The combined $637 million shortfall “substantially” exceeds Christie’s estimated $300 million ending balance, Rosen said.
“The significance of the differences are magnified” by the size of Christie’s projected surplus, Rosen said.
The governor, a 50-year-old Republican seeking a second term, is counting on a 4.9 percent revenue gain to balance his budget for next fiscal year. That’s a smaller increase than he projected last year, when his forecast for more than 8 percent growth was challenged by Democrats and Standard & Poor’s.
Treasurer Andrew Sidamon-Eristoff said that he anticipates a slight sales-tax bump from Hurricane Sandy recovery and improving income levies. The state has logged rises in payrolls, car sales and the stock market, he said.
“New Jersey’s economy is clearly growing,” Sidamon-Eristoff told the Assembly Budget Committee. “In light of the improving economy and ongoing Superstorm Sandy recovery efforts, we are confident.”
State-tax collections have beat Christie’s targets for four straight months after missing projections for five in a row. For the fiscal year through March, collections of all major taxes are above projections by about $25 million, or less than 1 percent, the treasurer said yesterday.
Rosen said that while he expects income and corporate-tax collections to improve this fiscal year, the recovery won’t be as robust as Sidamon-Eristoff is predicting.
Christie’s administration has identified $512 million in spending that would need to be added to the current budget to cover Medicaid and employee benefits as well as snow removal and costs associated with Sandy, Rosen said.
The governor’s $32.9 billion spending proposal for fiscal 2014 is “structurally imbalanced” for a second year because it’s based on revenue goals that may not be met even after recent revisions, S&P said last month.