May 25, 2012
RE: State Revenue Estimates Down As Budget Deadline Looms
Immediate Action Needed on Municipal Funding Restoration (S-1900/A-2921)
This week in Trenton, State Treasurer Andrew Sidamon-Eristoff and Office of Legislative Services (OLS) Budget and Finance Officer Dr. David Rosen appeared before the Assembly and Senate budget committees to present revised revenue estimates for the State’s current and upcoming fiscal years. Looking at both the current State Fiscal Year (SFY 2012) and SFY 2013, beginning on July 1, OLS estimates that the State will have $1.3 Billion less than was anticipated when the Governor presented his SFY 2013 budget proposal to the Legislature in February. While State Treasurer Andrew Sidamon-Eristoff anticipates the combined SFY 2012 and 2013 revenue gap to be $676 million.
Both experts agree that Energy Sales and Corporate Business in the current year missed expectations by $264.7 million. The Transitional Energy Facility Assessment (TEFA) is now slated to miss expectations by $63.8 million. This shortfall was likely caused by the following factors: two major energy disruptions, caused by the August arrival of Hurricane Irene and the October snowstorm, during which energy companies could not deliver power; the historically mild winter, which reduced demand; and dramatically lower natural gas prices, caused by a glut in supply.
Despite these revenue gaps in the current State fiscal year, and despite slower than expected growth in Income, Sales, Corporate and other taxes, the State Treasurer testified that Governor Christie and the Legislature can balance current year spending through a combination of fund lapses and reduced supplemental needs.
While other policy initiatives could be threatened by the new revenue estimates, we believe the $66 million municipal property tax relief restoration embodied in companion bills S-1900/A-2921 remains viable. Despite slight differences in magnitude, both Treasury and OLS expect Energy Tax revenues to rebound next year.
Please contact your Legislators and urge them to support S-1900 and A-2921. Also, if you have not done so already, please adopt the following sample resolution supporting the swift passage of S-1900/A-2921:
PDF - http://www.njslom.org/resolutions/DRAFT-RESOLUTION-SUPPORT-PHASED-IN-RESTORATION.pdf
WORD - http://www.njslom.org/resolutions/DRAFT-RESOLUTION-SUPPORT-PHASED-IN-RESTORATION.doc
If you have any questions or need additional information on the Energy Tax Restoration issue please contact Jon Moran at email@example.com or 609-695-3481 x121.
William G. Dressel, Jr.
Very truly yours,