Budget analysts offer less rosy state revenue forecast
The nonpartisan agency that provides lawmakers with budget analysis said it expects the state to collect a slightly smaller amount of revenue than the Murphy administration has predicted in the fiscal year that begins July 1.
Still, the prediction, presented during a budget hearing in Trenton Thursday, would mean the state’s reserves will be healthy even if the more pessimistic forecast — that the state will collect $1 billion less than expected through July 2024 — proves accurate.
Sen. Paul Sarlo (D-Bergen), the chamber’s budget chairman, said lawmakers may use the lower number as they await more complete revenue information due in May.
“I think we actually should go into the budget based on your number and not the executive’s because I do agree with you. I think there’s going to be, although not a recession, there’s going to be a further softening of the economy,” Sarlo said.
Officials from the Office of Legislative Services expect the state to collect $53.1 billion in revenue in the fiscal year that begins July 1. That’s roughly $680 million behind the $53.8 billion in revenue the Treasury expects to collect.
The difference isn’t driven by any particular revenue source, though the office expects the largest differences to come from the state’s income tax ($276 million less than the administrations forecast) and sales taxes ($212 million less). All other major revenue sources are expected to see more modest declines.
The Office of Legislative Services also predicts lower revenue for the remaining months of the 2023 fiscal year, which ends June 30. The nonpartisan office expects the state will collect $374.7 million less than the Treasury anticipated, reducing total resources for the coming fiscal year by just over $1 billion when combined with the $680 million less in revenue the office expects in fiscal year 2024.
Murphy proposed a $10 billion surplus for the coming fiscal year.
The Treasury and the Office of Legislative Services will release updated revenue forecasts in May that will include filings made by the April 18 tax filing deadline.