Another week, another set of dire predictions for the state’s fiscal crisis.
A crowded Senate budget committee was the setting today when David Rosen, finance director for the nonpartisan Office of Legislative Services, presented the latest estimates on New Jersey’s budget hole, immediate and longer term.
The overall picture hadn't much changed from previous forecasts, he said, with multibillion-dollar shortfalls expected for both the current year budget, ending in June, and the upcoming fiscal 2011 budget.
“The revenue picture remains rather poor,” Rosen told committee members and a nearly full gallery of advocates and lobbyists.
He said on the positive side, sales tax collections appeared to have finally hit bottom and are seeing the first monthly increases in almost two years.
“They will probably exceed last year by a few million,” Rosen said of the December sales count. “That’s good news, I suppose.”
“But they’re still down 10 percent from two years ago,” he continued. “We’ll still miss targets by significant amounts.”
The mild-mannered Rosen has been a sought-after voice in the debate over the severity of the state’s fiscal crisis and what can be done about it.
While Republicans and Democrats differ on the extent of the problem and who’s to blame, Rosen’s office is known to provide unbiased research and budget analysis to both sides of the aisle.
Before the Senate panel, he took some solace—and humor—in being an outsider looking in. “I wake up every morning gleeful I’m not the Treasurer,” he said.
Less than a month into office, Gov. Chris Christie warned that the state’s crisis may be worse than thought and he will likely seek steep cuts in both this and next year’s spending.
The Democratic-led Legislature has been more cautious about what’s to come, while it devises its own strategy, budgetary and political.
Christie presented his plans for the current shortfall before a joint session of the Assembly and Senate. His fiscal 2011 plan will be presented on March 16 (see Midyear Budget).
Most immediate, the estimated gap for the current fiscal 2010 budget was up another $200 million, to around $2.2 billion, he said. Out of a total budget of nearly $30 billion, Rosen said the increase was mainly due to miscellaneous cost overruns and unrealized savings within the existing budget.
On the revenue side, the holiday season’s sales tax collections brought at least some relief, Rosen said, with a slight improvement over 2008. That was the first monthly increase in 20 months. Other smaller tax revenues remained down, some by double-digit percentages.
The next critical juncture is the April income tax collections, which Rosen cautiously estimated would meet expectations.
“We have our fingers crossed,” he said. “It is quite possible we could get a surprise in either direction.”
After that, New Jersey will face another shortfall going into fiscal 2011 with a budget estimated to be between $8 and $12 billion, depending on who’s doing the math. Rosen said his best guess was somewhere between $10 or $11 billion.
The long-term prognosis was not much better, as Rosen said it could be another four years before revenues matched the previous highs.