From the end of the Republican Whitman administration through the second year of the Democratic Corzine administration, state tax revenue grew every year from less than $20 billion in FY2000 to more than $33.6 billion in FY2008 when the Great Recession hit.
This eight-year revenue increase represented not only economic growth but also a major corporate tax increase and a hike in the top income tax rate from 6.4 percent to 8.97 percent for “half-millionaires” by Democratic Gov. Jim McGreevey, followed by an increase in the sales tax from 6 percent to 7 percent by Gov. Corzine. When the recession hit, Corzine imposed the 8.97 percent rate on those making $400,000, increased the rate to 10.25 percent for those making $500,000 and added a top bracket of 10.75 percent for those making $1 million or more. Nevertheless, state revenue plummeted from $33.6 billion in FY2008 to $30.8 billion in FY2009 and was projected to come in at $29.8 billion this year, and is expected by Christie and the legislature to be $28.364 billion in the fiscal year that begins July 1.