Additional $120 million revenue shortfall announced

TRENTON – Office of Legislative Services Budget Chief David Rosen today warned lawmakers that the state is facing an additional revenue shortfall of more than $120 million.

That amount is over and above the $230 million shortfall acknowledged by the Department of Treasury Tuesday.

According to the email, the newest shortfall comes in the form of energy tax receipts.  The information was released by the state as part of a pending bond issue.

“…the Fiscal Year 2012 revenue shortfall through April and the shortfall in utility sales and corporation business taxes noted above will have a significant negative impact on the ending balances for Fiscal Year 2012 and the beginning balances for Fiscal Year 2013 projected in the governor’s Fiscal Year 2013 Budget Message,” reads the statement in the bond issue supplement.

Reached for comment, Senate Budget Committee Chairman Paul Sarlo said according to conversations he has had with OLS officials, the shortfall could be as high as $200 million.

“Every day this comeback gets gloomier and gloomier,” Sarlo said. ” At this point in time we’re going to need to cut spending.”

The newest shortage, coupled with Tuesday’s announced $230 million, brings the year to date shortfall to at least $350 million. 

Sarlo has warned that the actual shortfall including the 2013 fiscal year budget could approach $1 billion.

Administration spokesman Michael Drewniak dismissed the energy tax receipt shortfall as in no way indicative of economic health.

“The energy tax receipts are part of a routine disclosure, and their level has no relationship to the health of our state’s economy,” Drewniak said. “As we’ve been saying, the Treasurer will address in detail the full revenue picture for the current fiscal year and the fiscal 2013 forecast at his budget testimony at the end of the month. “

The revenue shortfall is likely to jeopardize or at least alter plans for a tax cut.  A Senate bill that would have provided a 10 percent credit on property taxes for those earning less than $250,000 was scheduled to be heard in committee Thursday but was tabled.

Earlier this week, Senate President Steve Sweeney and Gov. Chris Christie were reportedly prepared to announce a deal that would have included Sweeney’s 10 percent credit, but with an income threshold of $400,000.  That deal also reportedly included the restoration of the earned income tax credit to 25 percent of the federal credit, up from its current level of 20 percent.

Sources in both houses of the Legislature said the potential for a tax cut is still alive, if on life support, as is the possibility of a deal with the administration.

Additional $120 million revenue shortfall announced