Legislative Budget and Finance Office David Rosen this morning told the Senate Budget Committee he expects the state’s revenue to come in a combined $125 million below administration estimates in the current and coming fiscal years.
Rosen also warned that the projected surplus of 1 percent is lower than he would like given the possibility of an error in revenue estimates.
Rosen spent much of his time before the committee dissecting Gov. Chris Christie’s revenue projections, telling the senators that the OLS revenue estimates for the current and coming fiscal years differ from the governor’s by only a small amount.
The agency is predicting that the current fiscal year revenues will come in $72 million less than Christie has predicted while 2012 revenue is predicted at $53 million less. The combined difference is marginal, Rosen told committee members.
However, Rosen said, the possibility of an “April surprise” is distinct due to the “potential errors in estimating the size and timing of the impact from the one-year tax increase and the interplay of New Jersey and New York State tax changes that impact state residents who work in New York.”
In addition to the potential for a revenue surprise, Rosen told the senators that an expected $10.2 billion in federal funds could be at risk due to federal budget wrangling. Also putting the fiscal year 2012 budget at risk is the potential for a court-ordered school funding payment resulting from a Supreme Court decision in the latest Abbott funding case.
Last week, a special master concluded that the funding contained in the fiscal year 2011 budget was inadequate. The Supreme Court is due to decide the case later this spring.
Rosen also warned senators that the predicted budget surplus of just 1 percent of the total spending plan is lower than he would like, particularly when revenue forecasts on average are off by 3 percent nationwide.