BY BOB HOLT
According to one report, New Jersey needs growth it hasn’t seen since before the recession to avoid making severe budget cuts by the end of the fiscal year.
Governor Chris Christie’s administration measured the state’s budget shortfall at $451 million a month ago, but current trends have the figure at closer to $2 billion.
David Rosen, a budget analyst for the New Jersey Office of Legislative Services said New Jersey will need about 12 percent growth in revenue to meet Governor Christie’s budget projections, according to Newsmax.
The last time New Jersey saw that kind of economic growth was in 2005, when Governor James McGreevey installed a millionaire's tax and other ideas to increase tax revenues.
Christie’s latest budget projected more than seven percent growth in revenue during this fiscal year, but the state’s actual revenue has been under one percent since July. Christie said, according to NorthJersey.com, “Usually January and April are the big months on income tax because of the payment of Wall Street bonuses in January and then everybody squaring up their taxes in April, so I think there’s no question that we’re going to wind up being ahead of our projection on income tax.”
McGreevey’s millionaire’s tax raised income-tax rates on people earning over $500,000. The former governor also borrowed against New Jersey’s portion of a federal tobacco settlement, but NorthJersey.com reported that the state Supreme Court ruled that a violation of the state constitution’s balanced-budget clause.
Christie spokesman Michael Drewniak mentioned possible revenue gains from the Hurricane Sandy reconstruction.
“At a time when we’re still confronting the severe devastation of Hurricane Sandy and just in the beginning of the rebuilding process, we’re still seeing income tax revenue exceeding projections, and anticipate a significant uptick in labor, building and the related sales activities,” he said, according to nj1015.com. “There are far too many unknowns as our state begins to recover to jump to any conclusions that the sky is tumbling down on us or engage the Democrats’ desire in making this a partisan game.”