NJ Treasurer Likely A No-Show At Today’s Budget Hearing
Revenue collection for Fiscal Year (FY) 2012 missed Governor Chris Christie’s targets by more than a quarter-billion dollars according to the non-partisan research arm of the legislature.
Last week, the Office of Legislative Services (OLS) released its revenue snapshot for FY 2012 year-end totals. Today the Assembly Budget Committee will hold a special hearing to take testimony from OLS and State Treasurer Andrew Sidamon-Eristoff probably isn’t going to show up to testify according to sources.
Assemblyman Vinnie Prieto chairs the budget panel. He says, “I hope the Treasurer shows up and I’m optimistic that he will, but we’ll have the hearing either way. We’re trying to find out how accurate the OLS information is because OLS uses the resources that it has and it gives us a snapshot……We want to find out today not in December or January when we’re already half through the Fiscal year (2013) budget.””
Prieto is concerned that because just about every dollar in the state budget is already accounted for the State might have to tap into its surplus to keep the spending plan balanced. He says, “If we come into another issue how do we adjust because then our surplus will be probably less than 1% of the total budget.”
Last week, Governor Chris Christie dismissed the OLS memo. He pointed out that OLS boss David Rosen said last month the shortfall was $542 million, “Which means he was wrong by more than 50% – so lets’ give him another month – it’ll probably be down to a hundred million. I wish that OLS would stop playing politics.”
When Christie was asked his reaction to the prediction made by Dr. Rosen, he said, “How was he $280 million wrong in a month? And what’s his number going to be next month when he writes another politically motivated memo…It’s crazy to try to put out a guesstimate…There’s 5 different taxes that we still don’t even have the receipts for- for fiscal year 2012 – so I don’t know how he comes to that conclusion.”
The OLS memo explains that most FY 2012 major revenue collections and annual year-end revenue accounting adjustments are now complete. According to current figures from the State’s Comprehensive Financial System (CFS), the 14 major revenues tracked by OLS each month trail the Executive’s May 2012 targets by a combined $253.9 million.
In the aggregate, these major revenues grew by 2.9% over FY 2011. The revenues included in this report account for about 88% of budgeted State revenues and exclude certain energy-related revenues and various miscellaneous sources.
Sales tax receipts total $7.946 billion, $99.1 million below the Christie’s May revised target for FY 2012. OLs says, “This revenue significantly underperformed expectations during the last three months of the fiscal year, recording declining amounts in May and June and low growth in July.” Overall, the sales tax grew by 2.3% in FY 2012.
Gross Income Tax (GIT) cash receipts of $11.109 billion grew by 4.6% over the prior year. This total is $208.7 million above the Christie’s May revised year-end target. OLS explains, “Most of the additional amount is due to a larger than expected bookkeeping shift of certain partnership withholding receipts from the corporation tax accounts to the GIT.” For FY 2012 this shift was $190.8 million more than in FY 2011.
Corporation Business Tax (CBT) cash collections of $2.027 billion are down 9.0% from FY 2011. Total receipts are $286.8 million below the Executive’s May revised target for FY 2012. OLS says, “While the CBT underperformed expectations, the size of the shortfall in FY 2012 collections is largely a result of the $190.8 million increased bookkeeping shift to the GIT.”
The remaining ten major revenues differed from the Executive’s revised May targets by varying amounts. Combined, these ten revenues fell $83.0 million below their respective targets.