New Jersey is facing a $2 billion shortfall in its budget this year unless the state experiences a 12 percent growth spurt in tax collections over the next six months.
According to the Bergen County Record
, such an event is not likely to occur and without it the state could be facing cuts in education, property tax relief, and the public employee pension fund.
Gov. Chris Christie, however, is still hoping for increased tax revenues over the year from corporate bonuses, Wall Street gains, and the rebuilding taking place in the aftermath of Hurricane Sandy, the newspaper reported today.
According to David Rosen, a non-partisan budget analyst for the New Jersey Office of Legislative Services, Christie will need nearly 12 percent growth across all the state's major revenue streams to meet his budget projections, which many have labeled highly optimistic. Nonetheless, the governor says it's "too early to be pushing the panic button."
Unemployment in New Jersey was at 10 percent, among the highest in the U.S., before Sandy hit, and a lot rides on how soon the proposed $60 billion in federal Sandy relief aid gets to the state. The Senate has approved it, but the House has not yet acted on the total package.
New Jersey's financial outlook could benefit from the assistance the same way that Louisiana's economy grew in 2005 after it began rebuilding from Hurricane Katrina with nearly $52 billion in federal disaster aid, the Record noted.
New Jersey hasn't seen a large economic spike since the 2005 fiscal year, when then Democratic Gov. Jim McGreevey introduced a millionaire's tax and other so-called gimmicks to help boost state tax revenues.
Christie pointed out in last week's State of the State address that he has no plans for any such revenue-raising gimmicks and is in fact still pushing for an income tax cut, a position he has championed despite the state's financial woes.
© 2013 Newsmax. All rights reserved.