New Jersey Budget Shortfall Could Hit $2 Billion [AUDIO]
State revenue collections are far below Governor Chris Christie's projections even though they are up very slightly over last year.
That's what Dr. David Rosen, the top budget analyst with the non-partisan Office of Legislative Services (OLS) told the State Senate Budget Committee yesterday. He says midway through Fiscal Year (FY) 2013 revenues are lagging a little over $705 million behind the Governor's estimates and the shortfall could hit $2 billion at the current revenue growth rate.
Senate budget panel chairman, Paul Sarlo says Rosen's figures all but doom Christie's plans for a tax cut. Asked after the hearing if the Governor's tax cut is officially dead, Sarlo said, "Does the math work for you? I don't see where the math works."
"Since the conclusion of FY 2012, revenues have missed the Executive's targets in each of the first five months of FY 2013," says Rosen. "OLS tracks 14 separate revenues in our monthly snapshot. Through November, each of these revenues is trailing both the Executive target and the required annual growth rate."
Rosen says revenues have grown 0.2% for the first five months of this Fiscal Year, but they would need to grow by 11.9% over the remaining seven months in order to keep the budget in balance.
Sarlo asked Rosen, "Is that (11.9% revenue growth rate) possible? You don't have to answer that, but is that possible? That's not possible."
Rosen responded, "It's extraordinarily unlikely."
Sarlo asked Rosen what the deficit would be if the rate of growth stayed flat. Rosen said, "I will do the calculation, but I want to make clear to the press OLS is not projecting a shortfall of the magnitude I'm about to calculate. If our growth rate were to stay at 0.2% we would have a shortfall greater than $2 billion."
"David Rosen has been persistently negative and persistently wrong about the state's revenues, and his analysis today is no exception," says Christie's spokesman Michael Drewniak. "At a time when we're still confronting the severe devastation of Hurricane Sandy and just in the beginning of the rebuilding process, we're still seeing income tax revenue exceeding projections, and anticipate a significant uptick in labor, building and the related sales activities. There are far too many unknowns as our state begins to recover to jump to any conclusions that the sky is tumbling down on us or engage the Democrats' desire in making this a partisan game."
Republican State Senator Joe Pennacchio, a member of the budget committee says, "Today's 'special budget hearing' was really the Trenton Democrats attempt to kick off their 2013 gubernatorial campaign against Governor Chris Christie. It was a blatant show of hypocrisy at the expense of New Jersey residents, whose money and resources should not be squandered on political games."
Sarlo called Rosen to testify before his panel to determine if spending cuts are needed now. State Treasurer Andrew Eristoff was also asked to testify, but had a scheduling conflict. At the start of the hearing Sarlo insisted it would not be a witchhunt, but Pennacchio doesn't buy that.
"Governor Christie has always delivered a constitutional, balanced budget. He filled (former Governor Jon) Corzine's multi-billion dollar deficit to balance his first budget," says Pennacchio. "He balanced this year's budget, with a $465 million surplus and $183 million designated for tax relief, after cutting approximately $87 million in spending requested by legislative Democrats. I take seriously my state budget oversight duties as a member of this esteemed committee, but this committee should not be used for political games that waste time and public resources."