TRENTON – The Office of Legislative Services is projecting $302.4 million less revenue than the revenue target Gov. Chris Christie laid out in his budget message in late February.
OLS is forecasting a $637.1 million shortfall over this fiscal year and into the next fiscal year.
This is despite the 7.2 percent growth Christie is anticipating for the remainder of the fiscal year.
Either way, OLS says the administration’s projections are still too optimistic.
“To reach the revenue targets originally certified for FY2013 would require revenue growth of 12 percent for the remainder of the fiscal year. To reach the reduced FY2013 targets will require growth of 9.8 percent of the rest of the year,” OLS reported.
For the next fiscal year (FY14), a $334.7 million shortfall is predicted by OLS.
In December and January, the state saw a surge in income tax revenue, largely attributed to behavioral changes, an improved stock market, and windfall bonuses for high-income residents, according to OLS.
While 66,000 jobs were created in 2012, OLS sees little positive impact on income tax revenue growth.
For the remainder of this fiscal year, OLS and Treasury are both expecting growth in revenues, but they are still wide apart.
For example, OLS is predicting 8.4 percent growth in the gross income tax while the administration is projecting 10.4 percent growth. On the corporation business tax, OLS projects 17.4 percent growth, whereas the administration is projecting 26 percent growth. On the inheritance tax, OLS predicts. 12.5 percent growth, while the administration projects 31 percent growth.
Also, OLS cautioned it has been unable to identify an independent source to support projections of the $180 million casino revenue growth via Internet gaming. There could be a big shift if those numbers aren’t realized, OLS said.