Gov. Chris Christie's administration stands by its revenue projections and continues to call for a broad-based tax cut, despite the release of a memo suggesting a significant revenue shortfall.
David Rosen, legislative budget and finance officer for the state Office of Legislative Services, wrote that the state has $542 million less revenue than expected for the 2012 fiscal year, which ended June 30. Rosen noted that this total typically is reduced by $200 million to $300 million by year-end accounting adjustments, according to a memo to Sen. Barbara Buono (D-Edison) that Buono released on Thursday.
The state released its own revenue report on Thursday, noting that state income tax revenue in July was $54 million higher than a year earlier.
While Christie has called for a broad-based income tax cut, Democratic legislative leaders have said that a tax cut depends on the state meeting Christie’s revenue targets.
Christie spokesman Kevin Roberts said the revenue figures shouldn’t affect the budget.
“We are completely comfortable with our revenue estimates for fiscal year ’12 and prospectively into fiscal year ’13,” Roberts said.
A separate report on Thursday that state employment is down for the year strengthens the case for a tax cut, Roberts said.
“With the jobs numbers that we saw coming in yesterday, we know now more than ever that the (Jon) Corzine Democrats that were complaining about a sluggish economy need to get behind the tax relief plan offered by the governor to grow the economy now,” Roberts said.
State Treasurer Andrew Sidamon-Eristoff said the July revenue numbers would help balance the budget.
“Allocating additional July revenue for the closeout of fiscal 2012 is a prudent action based on sound accounting practice and consistent with prior years,” Sidamon-Eristoff said. “The fact that July collections were significantly higher is a clear signal that the economy continues to grow.”
New Jersey Chamber of Commerce Senior Vice President Michael Egenton said the revenue numbers don’t square with positive economic news being reported by chamber members.
“The optimism is still there,” Egenton said, adding that business owners say they are hiring. “That’s an on-the-spot gauge that we use.”
Egenton said that while adjustments may be made to the budget, the focus should be on cutting spending, not reducing a tax cut.
“There’s always cuts to government at any level that can be made,” Egenton said. “We’re not talking about essential services, we’re talking about the bureaucracy.”
National Federation of Independent Business New Jersey Director Laurie Ehlbeck also said tax cuts are needed.
“Some legislative leaders have forgotten that when Gov. (Christie) Whitman cut taxes, revenues increased as a result of the growing economy,” Ehlbeck said.