TRENTON – While the state’s revenue picture is bleaker than officials would like, the nonpartisan Office of Legislative Services reassured legislators the state “Is not witnessing a fiscal meltdown.”
The OLS budget chief David Rosen told the Assembly Budget Committee “revenues are continuing to grow, but at a pace which is a good deal more modest than had been anticipated” by Gov. Chris Christie.
While all the major taxes showed growth from last year, they were far short of the administration’s projections., resulting in a combined $1.3 billion shortfall for fiscal years 2012 ($668 million shortfall) and 2013 ($635 million shortfall).
Of the $668 million shortfall for the remainder of fiscal year 2012, OLS is projecting a $329 million shortfall in energy revenues, $230 million shortfall in income tax revenue, $44 million below the governor’s sales tax revenue and $64 million below projections for the corporation business tax, and a $38 million revenue shortfall for the corporation business tax on banks and financial revenues.
For FY2013, OLS is projecting a $635 million shortfall. Of that, OLS forecasts a $388 million shortfall in income tax revenue, $49 million below projections in sales tax revenue, a $126 million shortfall in corporation business taxes, $55 million below Christie’s projections, and a $40 million energy tax revenue shortfall.
The energy tax revenue shortfall is the result “of a substantial drop in sales tax generated by natural gas sales,” Rosen said.
Rosen told legislators that so far in May revenues continue to lag projections, showing growth of 2 percent in income tax over a year ago and 1 percent in the corporate business tax.