TRENTON — New Jersey’s number crunchers might have missed their income tax target by about $280 million this year because of an “obscure provision of New York law” they did not fully understand, a legislative budget official told a Senate committee this morning. Like New Jersey, the New York last year raised the income taxes on the top earners...
David Rosen, Legislative & Budget Finance Officer of the Office of Legislative Service, testifies before the Senate Budget Committee at the Statehouse this morning. Rosen testified the state's income tax has fallen short of projections for this year stating "This year the April surprise was not discovered until the middle of May".
TRENTON — New Jersey’s number crunchers might have missed their income tax target by about $280 million this year because of an “obscure provision of New York law” they did not fully understand, a legislative budget official told a Senate committee this morning.
Like New Jersey, the New York last year raised the income taxes on the top earners – affecting Garden State residents who work in and pay most of their income taxes to the Empire State. But the tax increase, instead of only applying to income above $300,000, was charged across was to every cent of their taxable income.
“Frankly we didn't know about this particular provision of New York state tax law,” said David Rosen, the budget officer for the nonpartisan Office of Legislative Services, which provides projections and research to the legislature. He cautioned, though, that his office was not certain the New York "hypothesis" was the reason for the shortfall.
Rosen said his office estimated the state will finish off the year that ends June 30 with $10.1 billion in income tax collections that fuel state spending, down from a previous estimate of $10.4 billion.The total shortfall for this fiscal year will be $401.9 million, meaning Gov. Chris Christie’s administration has to come up with an equivalent number of changes in the five weeks left in the budget year.
OLS also changed its projections for the budget that starts July 1 – the $29.3 billion budget Christie and the Democrat-controlled legislature have been fighting about for months – saying there needs to be about $365 million more in cuts from that already austere budget.
State Treasurer Andrew Sidamon-Eristoff, who used to run the New York state department of taxation and finance, was scheduled to testify in front of the Senate budget committee this afternoon at noon.
“The solutions are more spending cuts or revenue enhancements,” Rosen said. “Clearly that’s going to be very difficult given the level of cuts that are already proposed.
Previous coverage:
• Unexpected N.J. budget shortfall will likely force cutbacks
• N.J. Gov. Chris Christie says Statehouse rally had 'absolutely no effect' on him
• N.J. property tax cap proposal gets boost from study of Massachusetts taxes
• Record crowds flood Trenton to protest against N.J. Gov. Chris Christie, budget cuts
• N.J. Gov. Chris Christie gets cheers, jeers during bill signing at Monmouth Park racetrack