Gov. Chris Christie’s new fiscal year budget is, by most accounts, optimistic. He plans to cover pension funding and give more money to public schools — all while cutting everybody’s state income tax by 10-percent.
He can afford to do this, he says, because he estimates the state’s revenue will grow this year by 7.3 percent.
But now a memo from the state’s nonpartisan Office of Legislative Services says that the governor’s revenue projections for the fiscal year that ended June 30 fell short by $500 million. That’s enough to cut the expected surplus in half.
“For Jane and Joe New Jerseyan, this is yet another indication that the kind of ‘Jersey Comeback’ that we’ve been hearing so much about is not perhaps as strong as many people had hoped,” said Brigid Harrison, political science professor at Montclair State University.
“Practically, it means the Democrats now have increased fodder for their argument that his estimates were way off base,” said Harrison. “And that the state can ill afford the 10 percent across-the-board tax cut that he proposed.”
State Sen. Barbara Buono, D-Middlesex, is one of those Democrats.
“Everybody wants a tax cut, but in a situation where the revenues are falling so far short of what we anticipated, it doesn’t bode well for a tax cut,” said Buono, chair of the Senate Budget Committee.
Combine this budget shortfall with Thursday’s news that New Jersey’s unemployment rate has risen to 9.8 percent — the highest in 35 years — and the chance of the Democrat-controlled Legislature passing a tax cut gets slimmer. The state relies on income tax for nearly one-third its revenue.
“This is kind of like a one-two economic punch for the governor,” Harrison said.
Christie’s office didn’t return calls for comment.