Sagging revenue, looming costs could sink big senior citizen tax cut plan

January 22, 2024

Sagging revenue and a bevy of looming funding needs in the coming fiscal year threaten to pull New Jersey’s $8.1 billion surplus below a threshold that would pause the nascent StayNJ property tax relief program before it sends out a single payment.

Revenue from New Jersey’s major taxes — like its income, corporate business, and sales taxes — were down $529.9 million, or about 2.8%, over the first six months of the fiscal year, which began July 1. The 6% drop in income tax collections accounts for the largest share of the decline.

Treasury officials predict slight revenue growth in the latter half of the fiscal year but it’s not clear such a rebound would be sufficient to meet coming costs without draining the surplus, cutting spending, or levying new taxes.

“It is possible that maintaining the surplus at 12% is going to be a problem,” said Marc Pfeiffer, a senior policy fellow at the Rutgers’ Edward J. Bloustein School of Planning and Public Policy.

Pfeiffer added that a revenue rebound, budgetary maneuvers, and state efforts to consolidate certain aid programs could help the state maintain its surplus.
“It’s all about these moving pieces of a jigsaw puzzle finally settling in, and the governor and treasurer are going to make their best shot at this in February,” Pfeiffer said, referring to estimates in the governor’s February budget address. “But that’s why they do revenue estimates in February and then they do a late estimate in May or June once income tax revenues start coming in.”

The Press of Atlantic City, January 22, 2024

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