BUSINESS & ECONOMY

Independent Review: NJ Revenues Trail Expectations

By Erin Delmore
Correspondent

If it’s spring, it’s budget season and now that Gov. Chris Christie’s laid out his proposal for fiscal year 2018, it’s up to legislators to find a way to dole out the dollars.

“This morning we are privileged to hear from the Office of Legislative Services,” said Assembly Budget Committee Chair Gary Schaer.

The Assembly Budget Committee heard today from Frank Haines, legislative budget and finance officer to the committee and from Catherine Brennan of the Office of Legislative Services and from State Treasurer Ford Scudder.

“Fundamentally this budget reflects and advances the governor’s continuing strategic priorities providing more efficient and structurally sound government, enhancing New Jersey’s competitiveness and maintaining high quality critical safety support services for New Jersey’s most vulnerable citizens,” Scudder said.

From the Office of Legislative Services, an independent revenue forecast for legislators to hold up against the governor’s proposed $35.5 billion budget blueprint. In the plus column, the gross income tax and the sales and use tax totaling two-thirds of the state’s revenue. Major expenditures: local public education and health care for the elderly and disabled. The bottom line: revenues are trailing expectations. Both OLS and the executive branch have revised revenue projections for this fiscal year downward. And over fiscal years ’17 and ’18, the difference between the governor’s forecast and the OLS estimate is more than $436 million — less than 1 percent over the two years. OLS says for what it’s worth, state tax collections are down nationwide.

“Both estimates are modest by historical standards, but both require improvement from what the OLS concludes is a weak underlying growth rate of just eight-tenths of 1 percent through February,” Brennan said.

The state treasurer touted a falling unemployment rate and payments into the state’s public employee pension fund. He said phasing out the estate tax is already having a positive impact. Legislators asked him to defend the state’s credit downgrades under the governor’s stewardship.

“Of the downgrades themselves, I don’t see any particular impact. Investors are looking at the state of the state budget as a whole, its trajectory,” Scudder said.

The Assembly Budget Committee just finished holding three public hearings on the budget where constituents aired concerns about everything from increasing funding for flood mitigation projects to decreasing health care costs. Once the Assembly and Senate committees conclude their reviews, they’ll face the task of writing — and approving — an appropriations bill.