New Jersey’s state budget is facing a $436 million revenue shortage over two years, according to a new analysis obtained by Observer NJ.
At $436 million, the two-year budget gap is small compared with some of the revenue shortfalls that have bedeviled Gov. Chris Christie in previous years. But any sort of fiscal strain is unwelcome news for New Jersey, which is struggling to fund key programs such as schools and pensions, and has been buffeted by 11 credit-rating downgrades under Christie.
Tax collections for the current fiscal year are on track to come in $223.3 million below Christie’s estimates, according to the analysis by the nonpartisan Office of Legislative Services.
For the coming fiscal year, which begins July 1, Christie has proposed a $35.5 billion budget. OLS analysts estimate that his revenue projections are off by $212.9 million in that budget year.
The revenue picture may change dramatically after April tax collections are tallied. Nearly 40 percent of New Jersey’s budget is funded by the state income tax, the bulk of which is collected close to the April deadline for filers.
The revenue shortfall is likely to be a key discussion point at the Assembly Budget Committee hearing scheduled for Wednesday. OLS analysts and state Treasurer Ford M. Scudder are slated to testify.
Weak revenue collections were one of several factors cited by Moody’s Investors Service last week when it downgraded the state’s bond rating from A2 to A3, the latest ratings cut under Christie.