Following months of missed revenue targets that dogged Gov. Chris Christie's efforts to provide a 10 percent income tax cut to residents, the state Treasury today reported February marks the third consecutive month that New Jersey's revenues exceeded initial forecasts.
The state collected revenues of $156 million in February, 9.5 percent ahead of the forecast, owing to continued strength in sales tax collections and higher income tax collections.
"The steady gains we have been seeing over the past three months add up to a very encouraging trend," Treasurer Andrew Sidamon-Eristoff said in prepared remarks.
Sales tax collections were up 6.6 percent, and income tax collections 5.1 percent, on a year-over-year basis. From July through February of fiscal 2013, income tax collections were 8.6 percent higher, and sales tax collections 2.1 percent higher, than those receipts over the same time period last year.
James W. Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy, said the increased revenue is likely the result of a better job market.
"The numbers suggest the economy is doing well and consumers are spending more," he said. "Job growth in 2012 was better than job growth in 2011, and 2011 was better than 2010. Each year it's increasing, and that certainly bodes well for revenues."
February also saw a more than 50 percent year-over-year increase in collections of the realty transfer tax, which is paid when real estate transactions are completed. With February's gain, collections of this tax in fiscal year 2013 are 7.2 percent higher than they were last year.
"The housing market is in the midst of an astounding rebound," said Jeffrey Otteau, president of the Otteau Valuation Group. "Home sales in calendar year 2012 increased by 21 percent, and by 23 percent in January 2013."
Also contributing to the rise in realty transfer taxes, Otteau said, is that median home prices in New Jersey increased by 2.9 percent in the fourth quarter of 2012, compared to the same period one year earlier.
"These trends, coupled with a net gain of 30,200 nonfarm jobs in December — the largest single-month increase in the state in 20 years — suggest better economic and fiscal conditions ahead," Otteau said.