As reported by nj.com, tax collections during the first two months of the current budget year fell significantly short of Governor Chris Christie’s aggressive revenue projections, according to figures released by the Treasury Department. Monthly revenue reports this early in the year do not typically garner much public attention, but they have taken on added meaning this budget cycle because the results will help decide whether New Jerseyans get a tax cut and whether Christie’ so-called “Jersey Comeback” is more than a catchphrase.
The State collected $1.9 billion in revenue in July and August, 4.9 percent less than the $2.03 billion Christie projected and less than 1 percent lower than the State collected over the same two-month stretch last year. The lower-than-expected collections included the top two major revenue categories of income and sales taxes, which were off by 3.9 and 6.2 percent, respectively.
Christie is banking on robust growth of about 8.2 percent in revenues in the current $31.7 billion budget to cover increased pension costs, additional educational spending and what he hopes is the first phase of an across-the-board income tax cut. Democrats are delaying a decision on the tax cuts to see if Christie hits his targets.
The latest monthly revenue figures come a day after Standard & Poor’s lowered the State’s credit outlook citing the Governor’s optimistic revenue projections. The agency affirmed the State’s credit rating of AA-, among the worst in the nation, but warned that it could downgrade the rating if the projections fail to materialize. A downgrade could cost taxpayers significantly more money in borrowing costs.
State Treasurer Andrew Sidamon-Eristoff pointed out a few of the highlights in the otherwise lackluster report that he says shows the State is heading in the right direction. He noted that August income tax collections were an all-time high and business taxes beat projections. “Income tax and corporation business taxes are showing welcome strength,” Sidaamon-Eristoff said in a written statement. “Both July and August income tax were strong, and August even beat the pre-recession results of Fiscal 2008.”