Bloomberg News

N.J. May Cut Budget as Revenue Falls Short, Christie Says

December 21, 2012

Governor Chris Christie said he’s evaluating whether to cut New Jersey’s budget for the current fiscal year, while the state reported revenue trailed targets by 11 percent last month, citing the effect of Superstorm Sandy.

Receipts fell short of projections by $183.7 million in November, as Sandy’s floods and coastal destruction deterred shoppers and gamblers. Income-tax collections missed targets by 11 percent, the Treasury Department said in a statement. By Nov. 30, fiscal 2013 revenue was $451.2 million, or 5.6 percent, lower than estimated in the $31.7 billion budget.

Before the November revenue report, Christie, a 50-year-old Republican in his first term, said tax collections may rebound in a few months as Sandy rebuilding continues. Such an increase may offset the need for spending cuts, he told reporters in Newark, the state’s biggest city.

“After Sandy, we very well may need to; we’re evaluating” possible budget cuts, Christie said. “If we need to, we will. Our state was essentially closed for the month of November.”

Christie’s budget for the year that began July 1 predicted revenue growth of more than 7 percent. Through Nov. 30, revenue was 0.2 percent higher than for the same period of fiscal 2012.

12% Needed

In a memo to lawmakers this week, the nonpartisan Office of Legislative Services said that revenue would need to climb 12 percent for the rest of the year to meet Christie’s budget.

State Senator Paul Sarlo, from Wood-Ridge, and Assemblyman Vincent Prieto, from Secaucus, both Democrats and budget committee chiefs, said lawmakers will have to review spending planned for the rest of the fiscal year.

“After the first of the year we’ll sit down and figure out” how to get the budget into shape, Sarlo said. “You take the shortfall from fiscal-year 2012 and the shortfall so far for 2013 and that’s almost $1 billion. The governor is going to have to make his cuts.”

Sandy’s effects back up the Democratic-controlled Legislature’s withholding of $183 million that Christie planned in tax credits, saying the state might not be able to afford it.

“You never know what’s in store for us,” said Prieto, referring to the biggest Atlantic storm on record, which by the administration’s estimate cost New Jersey $36.9 billion.

The state doesn’t have the money to rebuild on its own, Christie said. He has joined governors from other states, including New York and Connecticut, in pressing Congress to pass $60.4 billion in aid to help the recovery.

Casino revenue was 51 percent less than budgeted for November, while income-tax receipts trailed estimates by 11 percent, the Treasurer’s office said. Also damping collections was the state’s decision to let some taxpayers delay some payments, Treasurer Andrew Sidamon-Eristoff said in a statement.

Congress needs to “get its act together for 15 minutes” to pass Sandy relief proposed by President Barack Obama, Christie said. He called for approval by Jan. 1.

To contact the reporters on this story: Terrence Dopp in Trenton, New Jersey, at tdopp@bloomberg.net; Elise Young in Trenton at eyoung30@bloomberg.net.

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


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