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Posted: Thursday, 13 November 2008 5:46AM
New Jersey Budget Deficit Worsens
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TRENTON, NJ (AP) -- New Jersey got more unwelcome economic news Wednesday: With tax revenues off by $258 million through the first four months of the fiscal year, the state's budget deficit could reach a staggering $1.2 billion, administration officials reported.
The new deficit projection is triple the previous $400 million prediction and likely will force a new round of cuts to the budget that went into effect on July 1.
Gov. Jon S. Corzine said bleak economic conditions nationwide are forcing the state to revise its financial projections.
``It doesn't surprise me, between the sharp decline in the economy and the ongoing recession, that the data that we get shows our revenues have deteriorated pretty substantially in October,'' Corzine said at an afternoon briefing to discuss the latest numbers.
Corzine also said the state could face a $5 billion hole in the fiscal 2010 budget, which is already being worked on and goes into effect next July 1. The state Constitution requires that budget revenues match expenditures, which means spending cuts must be made whenever revenue falls shy of projections.
Treasurer David Rousseau said the current shortfall comes even though ``we were cautious and conservative with setting our revenue projections for the fiscal year.''
He reported revenues $211 million below projections in October alone. Gross income tax collections were off by 14 percent, or $116 million; sales tax collections were 4 percent, or $28 million, below projections; and corporate business tax collections were off by 16 percent, or $30 million.
``We have a national recession that is putting enormous pressure on job growth and stability in our communities,'' Corzine said, encouraging the Legislature to approve the economic stimulus package he proposed.
Corzine said he has ordered his Cabinet members to trim $600 million from their existing budgets to deal with the shortfall.
In August, the governor asked Cabinet officials to prepare for $500 million in cuts, which he had hoped would not be necessary. Now he is looking to pare their budgets by an additional $100 million.
The governor said nothing was off the table, but that public safety and programs serving the most vulnerable likely would be spared.
He said he is not anticipating layoffs.
All large purchasing contracts are being reviewed for possible savings, he said, and some equipment purchases are being delayed.
However, he is pushing ahead with some expensive capital projects, including widening portions of the New Jersey Turnpike and Garden State Parkway and building a new commuter rail tunnel into New York City, hoping they will create jobs and stimulate the state's economy.
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