TRENTON – With news that income tax revenues are expected to be much larger than originally projected, Democrats and Republicans are both showing caution in their plans for the extra money.
Over the current and upcoming fiscal year, the Office of Legislative Services is projecting $914 million more in tax revenues, a bulk of which is made possible by $812 million more in income tax revenue projected for fiscal year 2012.
Assemblyman Declan O’Scanlon, (R-12), of Red Bank said the list of options should include increasing the budget surplus, providing additional property tax relief, investing some of those funds, debt service and pension payments.
OLS budget officer David Rosen recommended 3 percent of the projected budget, or $900 million, should be kept in surplus.
Assembly Budget Chairman Lou Greenwald, (D-6), of Voorhees, cautioned there are still “a number of areas of uncertainty,” such as the Supreme Court’s decision on school funding, a decision that could force the state to come up with $1.6 billion to fund at-risk school districts.
“I think we have to deal with the dramatic needs of the taxpayers and look to increase aid,” he said. “I think you need to be very conservative.”
O’Scanlon admitted the Supreme Court decision could tie the state’s hands.
“If they forced our decision, that would be unfortunate,” he said.
O’Scanlon added that even though Rosen said there is no real evidence of outward migration of high-income owners as a result of the millionaire’s tax, “it’s still lousy policy.”
Republican Sens. Anthony Bucco and Tom Kean both urged restraint when it comes to the projected windfall, warning colleagues that tax revenue is notoriously fickle.
Assmeblyman John Burzichelli, (D-3), Salem, said the money must go to property tax relief for seniors.
“We have to be cautious with any estimate and continue a hard-line on controlling spending, but it’s my hope that the governor will be willing to work with us now to reverse cuts in programs vital to working-class New Jerseyans, most notably property tax relief,” he said. “And property tax relief for senior citizens needs to be among our top priorities.”