Christie’s N.J. Tax Cut Threatened by Sandy Revenue Loss
New Jersey Governor Chris Christie said he isn’t sure whether he’ll still pursue a tax cut that was the centerprice of his economic strategy because Hurricane Sandy may have hurt state revenue in October and November.
Collections may pick up in the months ahead as New Jersey residents replenish supplies to rebuild, Christie, 50, told reporters today in Lincroft. He said he will decide whether to push for lower taxes after seeing the latest revenue figures.
“In the short term, these past two weeks, I’m sure we’ve experienced the diminution of revenue,” Christie said. “The question is what will the revenue picture be.”
Christie, a first-term Republican, spent much of this year touting a “Jersey Comeback,” a recovery plan that sought tax cuts or credits. His revenue forecasts have been challenged by Democrats, who control the legislature, and by Standard & Poor’s, which revised its outlook on the state’s debt in September to negative from stable.
Collections for the first three months of the fiscal year that began July 1 missed Christie’s forecast by 4 percent, putting revenue about $175 million short of his targets.
Sandy slammed into the New Jersey Coast on Oct. 29, smashing entire oceanfront communities and leaving more than half the state in the dark. It crippled the biggest U.S. mass- transit network, led to gasoline shortages and caused at least 100 deaths in the U.S.
Christie said revenue probably will be down for October and November and he expects it will pick up from December through June.
Asked whether the loss of revenue would lead him to delay or scrap the tax-cut plan, Christie said: “Don’t know. I mean, I still have to work with the treasurer on that.”
“Rebuilding is going to require the purchase of enormous amounts of supplies, the employment of people who would not have been otherwise, presumably, which means more taxes from them,” Christie said. “And it would mean businesses have an opportunity to, responsibly and within the law, make more money than they would otherwise.”
Sandy helped to underscore why Democrats’ wait-and-see approach toward a tax cut was prudent, said Assemblyman Vincent Prieto, a Democrat from Secaucus who is head of his house’s Budget Committee.
Lawmakers set aside $183 million in the $31.7 billion budget for the cost of the tax cuts, and have refused to release it unless the state reaches Christie’s revenue targets.
Lost tourism will have an effect on New Jersey’s revenue through at least next year, Prieto said in a telephone interview today. The state’s 127 miles of beaches are the backbone of a $38 billion tourism industry, its third-largest.
“We had this devastation and although we’re going to get a lot of money from the federal government, there’s probably going to be a price tag for us,” Prieto said. “Right now is not the time to be talking about a tax cut.”
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