Yesterday, the State Senate Budget Committee got the latest state revenue projections. The non-partisan Office of Legislative Services (OLS) briefed the panel during the morning's session.

Later in the afternoon, State Treasurer Andrew Eristoff presented the unchanged Christie Administration estimates.

OLS is the non-partisan research arm of the legislature. David Rosen is its chief budget analyst. He says, for Fiscal Year 2012, revenues are $144.9 million, or 0.5%, below the Executive budget estimates. For FY 2013, the OLS revenue estimates are $392 million, or 1.2%, below the Executive budget projections.


Adding FY 12 and FY 13 shortfalls together reveals Governor Chris Christie's estimates for the current and proposed budget are $537 million dollars above the OLS figures according to Rosen who told senate budget panel members, "The $537 million difference over two is highly significant as you craft your budget."

To say the Governor is unfazed by Rosen's projections would be an understatement. "There are two things OLS has proven in this area: One is being wrong, and two is following whatever the agenda is of the majority of the Legislature," says Christie. "Last year when the Legislature wanted to spend more, they said I said we didn't have enough money. They turned out to be wrong about that. Now this year when I want to cut taxes, they say we don't have enough money."

Christie's $32.1 billion budget proposal is ambitious and relies on his revenues estimates. In the next Fiscal Year which begins July first, the Governor wants to increase education funding for to K-12 public schools and institutions of higher education. The Governor also proposes a 10% across-the-board income tax cut for every New Jerseyan.

Extended Audio of Governor Christie:

Rosen did have some good news. He explains, "Despite a scare or two there is growing evidence that the national economic recovery is taking hold and that New Jersey is participating in that upturn."

The two-part hearing was long, but not particularly riveting. In fact most of the few people in the gallery found it 'tedious."

There were several contentious exchanges. One involved Democratic State Senator Loretta Weinberg who questioned Eristoff on what she called a cable TV "tax." Eristoff referred to it as an assessment similar to what you might pay at a Motor Vehicles Commission. Weinberg says it's clear that she and the treasurer didn't attend the same types of schools because they weren't speaking the same type of English.

Another testy tete-a-tete came when committee chairman Paul Sarlo questioned Eristoff about Christie's reliance on non-recurring sources of revenue to keep this year's budget and next year's spending plans in balance. These revenue streams are known derisively as "one-shots," and Christie has railed against previous Governors for using the "gimmicks."

The current year's State Budget relies on $1.2 billion in one-shots. When Sarlo asked Eristoff if the Christie Administration is proposing $1.6 billion for next year, the treasurer said, "That's correct."

"In his first budget, Governor Christie said, 'the days of one-shot gimmicks, non-recurring revenues are over, over,'" said Sarlo. "We were sort of taken to the woodshed for including them in past years…….We were chastised, members on both sides of the (political) aisle for having non-recurring revenues. Why is there $1.6 billion in this budget?"

Eristoff explains that $288 million will be drawn down from the current year's budget surplus. Almost $600 million in non-recurring revenues is from money that would be lost due to business tax cuts and the first year phase-in of the Governor's 3-year plan for a 10-percent income tax for everyone. There's also a proposed $200 million diversion from the clean energy fund, a $200 million diversion from the affordable housing trust fund that's being called an "reallocation," a $75 million diversion from settlement fund for mortgages/foreclosures and more.

Eristoff says one-shots would make up 5% of the Governor's total FY 13 budget proposal if approved. He also points out, "In Fiscal Year 10 under the previous Administration (of Governor Jon Corzine) the reliance was 13%."