N.J. Revenue May Fall $937 Million Short, Analyst Says
New Jersey revenue may miss Governor Chris Christie’s targets by as much as $937 million over the next 13 months as collections from online gambling and energy taxes fall short, the legislature’s chief fiscal analyst said.
Revenue from Internet wagers through fiscal 2014 may be $30 million, or $150 million less than Christie’s $180 million projection, David Rosen of the nonpartisan Office of Legislative Services told lawmakers today. Energy taxes will fall short by $348 million after Hurricane Sandy led to service disruptions and less consumption, he said.
Christie, a 50-year-old Republican seeking re-election in November, told reporters in Lavallette today that his administration will cut its forecast for energy taxes by about $150 million. Christie’s and Rosen’s latest budget projections differ by about $800 million, the governor said.
“I don’t know, candidly, whether he’s just lost it or whether he’s playing politics,” Christie said of Rosen. The analyst has been wrong in the past and may be “doubling down” on an incorrect prediction, the governor said.
Christie has been critical of Rosen, 66, and his forecasts, calling him a “handmaiden” for Democrats who control the Senate and Assembly. Last year, the governor called Rosen the “Dr. Kevorkian” of budget estimates, referring to the deceased pathologist who advocated assisted suicide.
The governor is counting on a 4.9 percent increase in revenue to balance the $32.9 billion budget he proposed for fiscal 2014. His spending plan is “structurally imbalanced” for a second straight year because it’s based on revenue goals the state hasn’t met, Standard & Poor’s said in March.
New Jersey’s revenue collections have exceeded budgeted expectations for five months in a row after missing them for five. For the 10 months ended April 30, collections are 0.2 percent above revised projections, the state’s Treasury Department said in a May 16 statement.
Treasurer Andrew Sidamon-Eristoff told the budget panel today that the administration won’t lower its estimates for online gambling revenue and that the drop in estimates is primarily due to the lagging energy receipts. A $183 million decline in energy taxes will be offset by the lowered targets and transferring funds from other accounts, the treasurer said.
Christie last month renewed calls for a 10 percent tax cut that Democrats have blocked, saying that revenue is rebounding and the state can afford it.
Rosen told lawmakers that the state may miss revenue projections by $444 million in the fiscal year ending June 30, and $492 million in the next 12-month span. Six weeks ago, he placed the two-year gap at $637 million.
“This was sort of like dropping a bombshell,” said Senator Paul Sarlo, a Democrat from Wood-Ridge who chairs the budget panel. “It’s really going to impact his proposed budget going forward. We can get through this budget year, but it’s going to impact the next year and even years to come.”
Sarlo said he expects lawmakers in the Democratic majority to negotiate a budget with Christie and offer him the minimum number of votes needed to ensure its passage. The legislator said he expects the latest dispute to complicate that process.
Christie signed legislation in February authorizing online gambling to help New Jersey’s struggling casino industry. His 2014 budget anticipated a $1.2 billion market from Internet bets in its first year. Analysts at Moody’s Investors Service, Deutsche Bank AG and Bloomberg Industries have all said that sounds too optimistic, with their estimates ranging from $250 million to about $850 million.
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