TRENTON – The nonpartisan state Office of Legislative Services painted a bleak picture today of the state’s largest tax revenue sources – gross income, sales and corporation business taxes – saying they are growing at “approximately half the rate necessary” to reach the administration’s goal of 4.8 percent growth in the current fiscal year.
The Treasury Department issued revenue figures this morning that showed collections in some categories were down in April.
“Weak April collections for some of the state’s largest revenue sources further eroded the overall revenue situation with less than three months remaining in (fiscal year) 2012,” OLS said in an analysis today.
“In particular, gross income tax and corporation tax revenues declined compared to last year during the crucial April tax payment period.”
Compared to last year, the gross income tax revenues in April were down by 1.2 percent from a year ago, OLS said.
It added that the “crucial final payments for Tax Year 2011 are down 5.0% from last year’s levels.”
While the $5.9 billion in sales tax revenue last month was up 3.1 percent from last year, it is also below the 3.9 percent growth the administration was hoping for from this particular revenue source for the current fiscal year.
OLS said that sales tax collections must grow by 6.3% for May through the end of the year, or essentially twice the average growth so far this year.
Corporation Business Tax (CBT) cash collections are down compared to last year as well, only 0.7 percent so far this fiscal year, after a sharp decline in April. The revised FY 2012 CBT estimate requires 3.9 percent growth for the entire fiscal year.
April cash collections dropped by $85 million from last April, a decline of 15.6 percent. In addition, the smaller CBT for banks and financial institutions also took a nosedive last month, with year-to-date collections of $55.7 million down 40 percent compared to the same months last year.
While the administration is projecting revenues for this tax to be flat with last year, the OLS said that seems to be “an increasingly unlikely prospect.”
Gov. Chris Christie has previously dismissed analyses by the OLS, calling it a “tool” for the Democrats.