TRENTON -- New Jersey's budget analysts are projecting tax revenue this fiscal year and next will fall $687 million short of Gov. Chris Christie's estimates, according to data from the nonpartisan Office of Legislative Services obtained by NJ Advance Media.
OLS, which will deliver its estimate to the state Legislature Tuesday, believes tax collections will come up about $274 million short of the administration's projections for the fiscal year that ends June 30.
The bigger fissure is in tax collections for the coming fiscal year, which begins July 1. OLS is projecting taxes will come in $413 million below administration estimates.
In both fiscal years, corporation business taxes lagged estimates by more than $200 million.
Neither projected shortfall is especially significant in the context of a more than $35 billion budget. The Treasury Department will present its final revenue figures Tuesday, as well, where it will make recommendations to close any gaps in state funding.
Both derive estimates from past performance of different taxes and things like regional and national economic indicators.
These revenue updates come after the all-important spring tax collections that can bring good or bad news are finalized.
Earlier this spring, OLS estimated the state might come up $223 million short in this fiscal year and $213 million in the next.
Mid-year shortfalls have bedeviled New Jersey's budget for years, even as Christie's administration has adopted more modest projections.
With a heavy reliance on high-income earners through its progressive tax structure, budget experts warn, the state's gross income tax can be unpredictable. And the corporation business taxes are considered even more difficult to nail down.
Treasurer Ford Scudder said in April he expected last year's strong stock market performance should be reflected in reported unearned income this year.
But OLS warned that higher income taxpayers may defer taking their capital gains from 2016 to 2017 to take advantage of possible federal tax reform.