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The New Jersey Legislature's chief budget officer told lawmakers Tuesday that state revenues are likely to fall another $50 million to $100 million short of projections before the fiscal year concludes on June 30.
In a memo sent to lawmakers, Office of Legislative Services Chief Budget Officer David Rosen wrote that the biggest surprise in May's tax data was a drop in sales tax collections. He noted those collections were 2.3 percent behind the totals for the same period last year.
Assembly Budget Committee Chairman Vincent Prieto said the memo further calls into question Gov. Chris Christie's plan to cut income taxes by 10 percent. Prieto also said the "Jersey Comeback" the Republican governor often touts is "as much a fable as the Jersey Devil."
Democrats have attacked Christie's plan as disproportionately benefiting the very wealthy, who pay the most in income taxes.
"We have a serious budget problem on our hands, and it's time for the governor to put the slogans away and begin working together with us to responsibly fix it," said Prieto, a Hudson County Democrat. "This is not the time for national ambitions and tax cuts that benefit the rich. This is time to protect New Jersey's middle class."
Late last month, lawmakers heard competing revenue projections based on April figures. The Christie administration estimated the state will take in $676 million less than originally forecast through July 2013. Rosen put the shortfall at $1.3 billion over the same period, and Tuesday's memo means it could be as high as $1.4 billion.
Christie spokesman Kevin Roberts discredited Rosen's projections on Tuesday, saying they are consistently off the mark. Last month, Christie attacked Rosen, labeling him a partisan operative who is catering to Democrats' agenda. The OLS is considered a non-partisan agency.
Roberts also charged that Assembly Democrats are "jumping for joy" at the projections as a way of justifying tax increases. The caucus has presented a plan to offer property tax credits to the bottom 95 percent of earners in the state, which would be partially paid for by reinstating a tax on the state's top earners.
"Why would they let reality stand in the way of raising taxes when they have a partisan office backing them up along the way?" Roberts asked.
The state constitution requires that the budget remain in balance; therefore, news of lagging tax collections must be met with corresponding cuts in spending by the end of June.
Christie has proposed closing the current year's budget gap by borrowing against the state's transportation capital fund, reducing salary increases and spending less in other areas. His budget still contains $183 million to fund the first portion of a personal income tax cut that will cost $1.4 billion when fully phased in four years from now.
OLS and Treasury officials are expected to issue an official report in mid-June.