BUSINESS & ECONOMY

NJ Budget Officer: Tax Revenues $1.1B Lower Than Projections

By Michael Aron
Chief Political Correspondent

Following the traditional format, the Office of Legislative Services testified first.

Budget Officer Frank Haines said tax revenues were coming in $1.1 billion lower than originally projected for the remainder of this fiscal year and next.

“While it’s too soon to know exactly what is causing these results, the preliminary conclusion is that the weakness seen in spring tax filings reflects weak stock markets in 2015,” Haines said.

The Treasury Department went next.

Acting Treasurer Ford Scudder pegged the decline in projected revenue at $800 million and told Assembly Budget Committee members the whole country is experiencing it.

“I would love to be here to report that New Jersey is an outlier to the national phenomenon of reduced personal income tax revenue, which seems primarily attributable to a decline in unearned income, but unfortunately that is not the case,” Scudder said.

With less revenue to work with, Scudder said the Christie administration would make up the difference in three areas — the slowing of business incentive grants, a modest cut to hospital charity care and a more immediate tax grab on lottery winnings.

The rest of the decline can be made up through technical fixes, Scudder explained.

But Democratic Committee Chairman Gary Schaer wasn’t satisfied.

“I’ve had the privilege to serve in this Assembly as have so many of my colleagues for a number of years now and I keep on getting the impression that when it comes to the budget, we’re just applying more and more Band-Aids and more and more tourniquets and I don’t know if there’s any more space on this frail body of ours to apply more Band-Aids,” he said.

Scudder pointed to the so-called structural deficit.

“The overall budget has shifted tremendously under this governor, such that we’re now living within our means. So I think the definition of structural deficit has totally shifted. We’re still working toward making the full pension payment over time and we’ll still be doing three-tenths this year, four-tenths next year,” Scudder said.

The treasurer downplayed the revenue shortfall.

“At the end of the day, it’s not a huge problem. Our economy remains in solid footing. Our unemployment rate is below the national average. Job growth continues to be strong. We just had less non-wage income than we anticipated, both Treasury and OLS,” Scudder said.

“After six to seven years of Gov. Christie we have not solved anything, not even the structural deficit he spoke of so glowingly when he first came into office, disappointing today,” Schear said.

Schaer poked Scudder over the state’s bond rating.

“We’ve had nine downgrades since Gov. Christie took office and now we’re talking about the fear of even more?” asked Schaer.

“To be fair, the nine is really three downgrades by three different rating agencies,” Scudder said.

And where, Schaer asked, is the money for the Transportation Trust Fund?

“We as an administration are certainly disappointed that the Legislature has not yet come forth with a concrete proposal as the governor’s been asking,” Scudder said.

“I believe that the Legislature was equally disappointed that it not have the pleasure to hear from the governor in terms of initiating policy as he has on so many other areas,” Schaer said.

One ramification of a decline in projected revenue is that it’s going to make it that much tougher to cut a tax this spring, but the governor and his fellow Republicans are likely to keep trying.