N.J. Revenue Must Rise 10% to Meet Budget Goal, Memo Says
New Jersey revenue will need to rise 9.9 percent for the rest of fiscal 2013 to meet Governor Chris Christie’s budget goal, after collections through October fell short, the Office of Legislative Services said.
Revenue in the first four months of the year that began July 1 rose 3.4 percent above year-earlier levels. That’s less than the 8.4 percent growth projected by Christie’s administration, the nonpartisan office said today in a report.
“Most major revenues continue to lag growth rates necessary to achieve the certified year-end targets,” legislative budget analysts said in the memo.
Sales-tax collections have fallen 0.3 percent from the same period last year, after Christie predicted growth of 6.3 percent for fiscal 2013. Corporate taxes have risen 1.1 percent, short of a projected 26 percent increase, while casino revenue has dropped 0.9 percent after targeted growth of 18.5 percent.
The fiscal 2013 budget Christie proposed in February counted on a 7.2 percent total revenue gain compared with 2012, second only to a 7.7 percent jump projected by California Governor Jerry Brown, according to an analysis of a National Governors Association report by the New Jersey treasurer’s office.
Christie’s revenue forecasts have been challenged by Democrats, who control the Legislature, and by Standard & Poor’s, the credit-rating company that revised its outlook on the state’s debt to negative from stable in September.
The governor, a first-term Republican, has said Hurricane Sandy may have hurt revenue for October and November enough to throw his proposed tax cut into doubt, through rebuilding may cause a burst of spending. The OLS report also said that Sandy may hurt revenue in the short term and help later.
Kevin Roberts and Michael Drewniak, spokesmen for Christie, and William Quinn, a spokesman for Treasurer Andrew Sidamon- Eristoff, didn’t immediately respond to e-mails seeking comment on the OLS report.
Though Sandy slowed some revenue late in October, income taxes set a record pace and monthly revenue exceeded last year’s by 6.8 percent, Sidamon-Eristoff said in a report released on Nov. 23. The impact of the storm “will show up more starkly with November revenue figures,” he said.
Income-tax collections exceeded budgeted amounts by 4.2 percent in October and 1.6 percent for the four-month period, a sign of New Jersey’s economic recovery, said Charles Steindel, chief economist for the treasury department.
“The strength of the income-tax revenue is striking and reflects sustained growth in personal incomes going into the storm,” Steindel said.
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