State official says 'frightening' revenue plunge will spur budget scrutiny

Reduced sales tax collections and other revenue retreats driven by the weak economy already spurred Corzine to propose spending cuts and tax hikes, but the latest projections indicate the state’s revenue flow will shrivel even more.

“The governor will likely make a formal announcement [about further budget revisions] soon,” said Castner, who addressed about 50 business owners today at a New Jersey Chamber of Commerce breakfast held at Forsgate Country Club. “The revenue numbers that are coming down the pike are frightening, and all options will be on the table.”

He declined to detail the latest revenue shortfall, but Castner did say the state is “committed” to spending cuts and to taking other steps to rein in the budget, which currently stands at $29.8 billion.

The plan for the year beginning July 1 already shaves about $3 billion from the current budget — but increases employer payroll taxes, suspends property tax rebates for households making more than $75,000 and institutes a one-year income tax increase on individuals making more than $500,000.

“We’re aware of the financial challenges facing the state, but we don’t want to see the administration raise taxes and plug the budget gap on the backs of business owners,” said Jim Leonard, legislative lobbyist for the New Jersey Chamber of Commerce.

“Businesses are already facing tax hikes in the form of increased state unemployment insurance and the loss of the personal property tax deduction,” which may be used by sole proprietors, limited-liability partnerships and other business structures, he said. “We would like to see a re-evaluation of all budget programs. Nothing should be exempt” from possible spending cuts.