the staff of the Ridgewood blog
Trenton NJ, Senator Steven Oroho (R-24) said a State revenue update provided by the Treasury Department yesterday doesn’t support Governor Murphy’s claims that New Jersey is facing a massive budget shortfall that would require $10 billion of borrowing as the governor has repeatedly suggested. (https://theridgewoodblog.net/deferred-nj-april-tax-payments-track-close-to-expectations/ )
“Treasury’s revenue update clearly demonstrates that the massive $10 billion budget hole predicted by the administration has failed to materialize,” said Oroho, the Senate Republican Budget Officer. “When compared to the original $38 billion budget for 2020, the $200 million decline in revenues from 2019 is little more than a rounding error. The realized revenue data provided by Treasury doesn’t support the governor’s continued insistence that New Jersey needs to borrow billions.”
The State fiscal year typically runs from July 1st to June 30th, with corporate business and individual income taxes due on April 15. This year, however, the State’s fiscal year was extended to the end of September due to the coronavirus crisis, and both the State and federal deadlines for tax filings were extended to July 15th.
To account for the large shift of income and business tax payments from April to July, the revenue update provided by Treasury included a 13-month comparison of the State’s cash collections for the regular fiscal year through July for both 2019 and 2020.
For that 13-month period, actual cash collections from 2019 to 2020 declined from $35.118 billion to $34.919 billion, a reduction of less than $200 million, or 0.6%.
“The administration was predicting a catastrophic 30% drop in sales tax revenue and other large declines that the governor said would force the layoff of up to 200,000 public employees if he didn’t get approval for his massive borrowing scheme,” added Oroho. “We’ve been saying for weeks that the governor’s continued use of outdated revenue estimates from May was deceptive, wildly misleading, and intended to scare people into supporting his fiscally irresponsible borrowing demands. Yesterday’s Treasury report proved that everything we said was correct. Given the new data and vastly improved revenue trends, the governor’s case for borrowing billions is growing weaker by the day.”
Further, Oroho said the revenue update validates a call two weeks ago from Senate Republican members of the Budget Committee for the administration to correct materially misleading and knowingly inaccurate filings made by the Treasurer with the financial community claiming a $10 billion revenue shortfall based on the administration’s revenue projections from May.
“The Governor and Treasurer must correct the materially misleading information that was filed with the financial community based on the most dire estimates from May before the state had started to reopen and the economy and tax collections had begun to recover,” Oroho concluded.