New Jersey Gains $913 Million Additional In Tax Revenue (Unexpectedly?)

I guess that Chris Christie was on the right track after all.

NJ.com

New Jersey is projected to take in $913 million more than expected in tax revenue through June 2012, according to new projections by the nonpartisan Office of Legislative Services.


The revised estimate will likely spark a partisan battle over how to spend the unexpected windfall as lawmakers consider Gov. Chris Christie’s proposed $29.4 billion budget.

OLS will be present the figures today to the Assembly Budget Committee, according to two sources familiar with the report who requested anonymity because they were not authorized to discuss it. State Treasurer Andrew P. Sidamon-Eristoff is also expected to give the committee the administration’s revenue estimates. A Treasury spokesman declined to comment today.

The surge will come from an unexpected increase in income tax revenue, according to a section of the OLS report obtained by The Star-Ledger. All other taxes were below administration estimates for the 14-month period, according to the report.

The new numbers will be announced as the state Supreme Court is considering whether Gov. Chris Christie and lawmakers need to provide up to $1.7 billion more in school funding.

The news will likely change the tone of the budget debate underway in Trenton that has up to this point largely focused on modest restoration to cuts in programs.


"The governor has balanced his budgets on the backs of the middle class, now this gives us an opportunity to undo that," said state Sen. Paul Sarlo, who as head of the Senate Budget Committee reviewed the OLS estimates.

Sarlo (D-Bergen) said he will push the administration to use the money for additional property tax relief and funding to schools, but stopped short of saying Democrats will offer their own budget proposal.

Assembly Budget Committee Chairman Lou Greenwald (D-Camden) said the money should be used to "restore some of the pain" Christie has caused with his budget cuts.

Christie spokesman Michael Drewniak said officials need to approach any good news prudently.

"While New Jersey is seeing signs of economic recovery, it is important to keep moving forward on a sound fiscal path and not revert back to Trenton’s out of control spending ways at the first sign of growth," Drewniak said.

Last year, Christie cut nearly $820 million in state aid to local school district and overall spent about $1.6 billion less than the school funding formula passed in 2008 requires, sparking the case that is now in the hands of the Supreme Court.

In his budget introduced in February, Christie called for restoring about $250 million to local school districts. He has also called for no increases in municipal aid and property tax rebates.

The OLS predicts the state will finish the fiscal year that ends June 30 with $683.9 million more than expected in income tax revenue, though business taxes will fall short by $190.1 million than expected.

In the fiscal year that begins July 1, income tax revenue will increase by $817 million more than expected, while businesses taxes will fall short by $252 million, according to the OLS report.

"It's a sign that that the national economy is rebounding," said Greenwald. "But we still lag in job growth, and I hope the governor uses this as an opportunity to invest in the economy."