Tax collections for Gov. Chris Christie’s $33.8 billion budget were running $62.5 million ahead of revenue targets at the end of the first quarter of the state fiscal year, according to new figures from the Department of Treasury.
The tax-collection data, obtained by NJ Spotlight via a public-records request, provides more detail on how the revenue side of Christie’s budget is shaping up than the official first-quarter revenue report released by Treasury last month.
The new figures showing a small revenue surplus also reinforce the measured confidence that Treasury officials expressed last month when the initial tax-collection report was made public. And they offer another reason for some optimism in a state that has struggled with sluggish tax collections in recent years during a slow recovery from the most recent recession.
Though highly technical in nature, the monthly revenue reports are important because they help show whether the state is living up to a requirement to maintain a balanced budget that’s set in New Jersey’s Constitution.
Christie, a second-term Republican, has been forced to delay property-tax relief payments, take funding from planned contributions to the public-employee pension system, and rely more heavily on borrowing to pay for transportation projects as a result of revenue shortfalls in prior fiscal years.
Dollar-to-dollar comparisons of tax collections to budget targets demonstrate in detail whether the state is running ahead of its projections or, as has been the case during several of Christie’s years in office, operating with a revenue shortfall that will eventually have to be offset by spending cuts or some other budget adjustment.
But under a policy change that began last year, the Christie administration’s official monthly revenue reports stopped showing those dollar-to-dollar comparisons, using in their place comparisons of growth rates for each tax source. Treasury has continued to use the new revenue reporting format during the current fiscal year, which began July 1.
Last month, NJ Spotlight requested the more-precise comparisons, which Treasury still calculates in-house. That more detailed summary showed tax collections came in slightly ahead of budget targets during both the month of September and the full first quarter of the current fiscal year, resulting in a modest revenue surplus.
In September, the state collected $2.86 billion, which was $98 million more than budget targets for the month. And for the first quarter of the fiscal year, tax collections totaled $5.04 billion, beating budget targets by $62.5 million.
Treasury’s official revenue report showed the state beat its projected 3.4 percent growth rate by 3.6 percent in September, and by 1.3 percent during the full first quarter.
[related]Despite besting the growth rates, Treasury officials last month offered some words of caution because September this year included one extra pay period, compared with September 2014. That quirk in the calendar made the comparisons with the prior fiscal year look more impressive, an effect that should smooth out once tax collections for October are counted.
Treasury officials have yet to release a report detailing those October collections, and a spokesman for the department declined comment yesterday on the more detailed revenue figures provided to NJ Spotlight.
Tax collections remain behind the state’s prerecession peak, according to data compiled by The Pew Charitable Trusts for its “Fiscal 50” survey.
New Jersey ended the past fiscal year on June 30 with a surprise tax-collection windfall, and Christie was able to increase funding for the surplus account that helps cushion against revenue shortfalls and unforeseen spending needs when the current fiscal year began on July 1.
The 2015 fiscal year’s revenue-growth goal of 3.4 percent also marks a far more conservative estimate than the aggressive projections that Christie has used in recent years when his budgets ultimately fell short of revenue targets.
Those improvements were noted by Wall Street credit-rating agencies in reports issued in advance of a state bond sale scheduled for today that will raise an expected $627 million in cash for the state Transportation Trust Fund.