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NJ Gov. Christie lowers revenue projections by $165 mln next year
May 20, 2013 / 10:41 PM / 4 years ago

NJ Gov. Christie lowers revenue projections by $165 mln next year

May 20 (Reuters) - New Jersey Governor Chris Christie’s administration on Monday cut state revenue projections through fiscal 2014 by $165 million, in part because of lower energy-related revenue, but the shortfall is not nearly as large as projected by the Democratic-led legislature.

The cut to Christie’s revenue forecast, which is less than a fifth the size of the shortfall projected by legislative staff, comes as he pushes again for a tax cut amid a big jump in revenue from personal income taxes.

The revised number means that the state spending plan for this fiscal year, which ends June 30, will shrink fractionally to about $31.19 billion from $31.32 billion, State Treasurer Andrew Sidamon-Eristoff told the state Senate Budget Committee.

As he pushes for his tax cut, Christie, who faces re-election this fall and is seen as a likely Republican U.S. presidential contender in 2016, has increasingly been at odds with the legislature’s budget office, which has forecast a lower growth rate.

One big drag on revenue is energy taxes, which for a second year in a row have come in lower than expected. That’s due to the warm winter, cheap natural gas, disruptions from Superstorm Sandy in October and increased energy efficiency. Inheritance transfer taxes and casino revenues have also lagged.

David Rosen, the legislature’s longtime chief budget officer, said on Monday that tax collections through the end of the next fiscal year will fall nearly $937 million short of Christie’s February estimates - $444 million this year and $492 next year.

Rosen is still forecasting that revenue will grow in fiscal 2014, but not by as much as Christie estimates.

Revenue from the legalization of internet gambling is one point of contention. Christie’s administration thinks the state can get $180 million through next year - an assumption questioned by the legislature and not included in Rosen’s estimates.

Democratic state Senator Paul Sarlo, chairman of the budget committee, called Christie’s hoped-for internet gambling revenue number “bogus.”

“That number just doesn’t make sense,” he said, in part because online gaming is months away from implementation.

The state must finalize a budget before July 1.

New Jersey has struggled more than some other U.S. states to recover from the recession, though the last several months have given it some good news. Like in other states, New Jersey’s jobless rate dropped, to 8.7 percent in April. That’s still higher than the U.S. average of 7.5 percent.

The state’s personal income tax collections also rose in April by 29 percent compared to the previous April, similar to other states that expect the increase to be a onetime boon tied to federal tax changes that became effective in January.

The Christie administration also hopes to get $120 million “within days” for privatizing the sales and marketing components of the state lottery, Sidamon-Eristoff said.

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