New Jersey’s baseline state revenues for fiscal 2021 will exceed $43.9 billion, nearly $4.1 billion higher than anticipated and well above the pre-pandemic peak of $38.3 billion during fiscal 2019, state officials said.
While the administration of Gov. Phil Murphy, a Democrat, heralded the news as a sign of an economic recovery, Republicans said it was more proof the administration misled lawmakers on revenue projections.
The revised figures, issued in writing on Wednesday, include an additional $581.7 million in sales tax collections and an anticipated $2.4 billion uptick in gross income tax collections. However, the $43.9 billion does not include the roughly $4.3 billion the state borrowed amid the COVID-19 pandemic and other revenue such as the “opening undesignated surplus.”
Under the updated budget, the total fiscal 2021 appropriations will likely exceed $41.5 billion. The state expects to end fiscal 2021 with a $10.1 billion “surplus,” representing an increase of more than $3.7 billion from an estimate provided in February.
Additionally, the federal government sent New Jersey $6.3 billion in “relief funds” as part of the American Rescue Plan (ARP). Some business leaders have called on the state to use the money to pay down its debt, which stands at more than $44 billion.
“Thanks to a remarkable two-month revenue collection surge – an April and May ‘surprise’ like no other – state tax collections in [fiscal 2021] are hitting historic highs,” State Treasurer Elizabeth Maher Muoio said in the written revenue update to the Assembly Budget Committee.
“Like we have said before, there was no playbook to follow for this crisis,” Muoio added. “The most recent historical context we have to draw upon was the Great Recession of 2008-2009. Following that crisis, it took New Jersey seven long fiscal years – until FY 2015 – to surpass the FY 2008 revenue peak.”
Senate Republican Budget Officer Steve Oroho, R-Franklin, said the updated projections prove the administration’s revenue figures were “grossly inaccurate.”
“When she last testified before our committee in May, Treasurer Muoio suggested revenues might be adjusted upwards by a few hundred million dollars,” Oroho said in a news release. “We deserve the opportunity to ask the Treasurer why the Murphy Administration’s guidance was off by nearly $5 billion.”
Oroho wants to form a special committee with subpoena power to investigate what he says is the Murphy administration’s misleading statements on state finances to taxpayers, lawmakers and the court. On Wednesday, Assembly Republicans sent a letter to Murphy and Muoio asking them to answer a dozen questions in the next 24 hours about the revised revenue information and why a Wednesday hearing related to the revised numbers was canceled.
Additionally, administration officials increased the fiscal 2022 budget by about $130 million to more than $44.9 billion in appropriations. Treasury officials expect a total combined surplus of more than $6.9 billion at the end of fiscal 2022, a more than $4.7 billion increase over February projections.
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