Bloomberg News

New Jersey’s Utility Payments Add to Christie Budget Woes

May 17, 2012

Governor Chris Christie’s budget plans took another blow from the revenue side as payments from New Jersey utilities trailed the Republican’s projections by $121 million, according to an Assembly Democrat.

The amount adds to a $230 million shortfall in fiscal 2012 receipts through last month, Assembly Budget Chairman Vincent Prieto, a Secaucus Democrat, said today in a statement, citing a state financial disclosure document.

“The more we look, the less likely we are to find this mythical ‘New Jersey Comeback’ the governor continues to oddly tout amid 9 percent unemployment,” Prieto said. The document cited first-half tax prepayments for fiscal 2013.

Christie, 49, has been pushing an income-levy rollback that counts on a 7.3 percent revenue gain in the 2013 budget, calling it a key to sustaining the state’s economic rebound. Analysts have said the proposal relies on overly optimistic revenue forecasts, and a shortfall in receipts has gathered momentum since February, missing by 5.3 percent last month.

In East Hanover yesterday, Christie said tax cuts are needed to revive the economy following the recession and to mitigate the 115 increases in levies and fees over eight years of Democratic control before he took office in 2010. Democrats hold majorities in both chambers of the Legislature.

Overdue Relief

“The people of New Jersey haven’t had a tax cut in over a decade,” Christie told the town-hall style gathering yesterday. “There will be some good Democrats who are willing to stand up and say that we’ll put party behind policy.”

The payments of anticipated taxes through the rest of the calendar year by utility companies failed to meet Christie’s forecasts, probably because of an “exceptionally mild winter and the sharp drop in natural gas prices,” the state said in the disclosure document distributed by Prieto. It said the shortfall, coupled with trailing fiscal 2012 receipts through April, may “have a significant negative impact” on the budget.

March revenue collections missed budget targets by 2.5 percent, according to Treasurer Andrew Sidamon-Eristoff. The current fiscal year ends June 30.

“The treasurer will address in detail the full revenue picture for the current fiscal year and the fiscal 2013 forecast at his budget testimony at the end of the month,” Michael Drewniak, a Christie spokesman, said by e-mail. “The energy tax receipts are part of a routine disclosure, and their level has no relationship to the health of our state’s economy.”

Sidamon-Eristoff is scheduled to testify before the Assembly Budget Committee on May 23, his spokesman, Andy Pratt, said yesterday by e-mail.

To contact the reporters on this story: Terrence Dopp in Trenton, New Jersey, at tdopp@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net


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