Is Chris Christie Banking On Phantom Revenues? [AUDIO]
Governor Chris Christie is counting on almost $500 million in revenue that the state may or may not see.
That's according to Dr. David Rosen, the budget and finance officer with the non-partisan Office of Legislative Services (OLS) who testified before the Assembly budget panel yesterday. If State Treasurer Andrew Sidamon-Eristoff is worried, he's definitely not showing it.
"The GBM (Governor's Budget Message) assumes that the introduction of Internet gaming will generate $180 million in casino tax revenue," says Rosen. "OLS has been unable to identify any independent source that endorses such an estimate and despite several explicit requests, the Executive has offered no analysis to support its estimate."
When Sidamon-Eristoff took his turn testifying before the budget committee he anticipated the casino tax revenue question and he was ready with answers.
"Simply put, we believe that Atlantic City's prospects are improving and that the recent legislative approval of Atlantic City-based Internet gaming will lead to a significant increase in revenues next year," says Sidamon-Eristoff. "We are basing our estimate on the enacted version of the legislation which included a 15-percent tax rate."
Affordable Housing And Lottery Funds
The GBM also assumes a $166 million dollar infusion from municipal affordable housing trust funds in the current fiscal year. That case is still before the courts and it is unclear when it will be resolved or if the State will emerge victorious.
Christie's FY 2013 budget also assumes the state will rake in $120 million by privatizing the Lottery. The fiscal year ends midnight June 30 and no deal has been struck or at least none that has been formally announced, but the Treasurer is confident the state will get the affordable housing cash it wants and that a Lottery deal can be closed.
"Overall, OLS projects $302.4 million less revenue in FY 2013 than does the GBM," says Rosen. "For FY 2014 the difference between OLS and the GBM is $334.7 million."
The math is simple. OLS projects $637.1 million less in revenue over the two fiscal years than does the GBM. That means Governor Chris Christie has 15 months to balance the two spending plans. In real terms, the difference between OLS and the Governor is roughly 1%.
Once again, Sidamon-Eristoff strikes an optimistic chord. He thinks revenues will match projections.
"New Jersey's economy is clearly growing," says Sidamon-Eristoff. "There is a growing body of macro-economic data, everything from rising payrolls and impressive gains in cars sales and housing permits to an increase in business filing activity, the rising stock market, and the record levels of personal income."
Democratic Assemblyman Troy Singleton is questioning the Christie administration's budget proposals for FY 2014, which he feels are risky because they rely heavily on uncertain revenue streams.
"There are a number of proposals in this year's budget that rely on sizable, but uncertain revenue streams," says Singleton. "Last year the administration was relying on raiding $200 million in affordable housing funds, which has yet to materialize because the move is tied up in court."
"To date, we have not gotten any information on how the administration will plug the hole in this year's or next year's budget if this money does not come through."
Assembly Republican Budget Committee member Jay Webber response to Democrats was colorful.
"Corzine Democrats more than doubled taxpayer debt when they were in charge last decade, and now they have the temerity to decry the actions of this administration, which has begun to bring under control the reckless practices of the past," says Webber. "Their hypocrisy is absolutely galling."
"Today, the Corzine Democrats showed that they treat taxpayer debt like a bottle of liquor. They talk about it like a bunch of Mormons, but behave like a bunch of drunken sailors."