Non-partisan Office of Legislative Services's David Rosen says 'projections for FY11 may have to be tempered'
David Rosen, Office of Legislative Services Budget and Finance Officer testifies before the Assembly Budget Committee at the Statehouse, in this April 2010 file photo. Rosen, in an internal e-mail, says there is a "high probability" that income tax could "fall significantly below" Gov. Chris Christie's projections for next year.
TRENTON — The numbers are finally coming in on New Jersey's most crucial state tax — and they don't look good.
Though a final tally is not available, an internal message from the Office of Legislative Service's David Rosen says there is a "high probability" the income tax could "fall significantly below" what Gov. Chris Christie expected — and that next year's projections might have to be adjusted.
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• Bill will require N.J. to show how much tax breaks end up costing the state
The income tax is the state's largest tax, projected to bring in $10.4 billion of this year's $27.7 billion in revenue, and $9.9 billion of $28.3 billion in revenue for the fiscal year that begins July 1. The state also charges sales and corporate taxes, while local governments impose property taxes.
Every year governors and lawmakers make spending changes based on whether revenues come in over or below expectations, but this year was especially difficult to predict.
For one, the state was experimenting with a one-year tax increase on the rich during one of the most tumultuous economic times in the state's history. Plus, residents in 12 of the state's 21 counties were given extra time to file their taxes because of flooding, pushing the deadline to May 11 — and squeezing the time frame for the state's number crunchers.
The e-mail, written by Rosen, says:
"As you are aware the GIT (gross income tax) collections for April were more than $550 million below expectations. Owing to the delayed filing deadline for many residents, we assumed that much of this shortfall would be made up in May. Based on the collection data now available, it seems that this assumption was overly optimistic. There is a high probability that GIT collections for FY10 will fall significantly below the levels assumed in the GBM (governor's budget message) and that projections for FY11 may have to be tempered as well. We will be working between now and Tuesday to quantify the impact in both years, but I thought you ought to be alerted to what we know at this time. "
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