State Treasurer Elizabeth Maher Muoio testifies before the Senate and Assembly budget committees on May 14.

State Treasurer Elizabeth Maher Muoio provides an update on state revenues to the Senate and Assembly budget committees on May 14.

Increases to the Corporation Business Tax enacted last year and record income tax collections for April have put New Jersey’s short-term finances in the black as lawmakers craft a state budget for the coming fiscal year.

Both the Office of Legislative Services and the Treasury Department said today higher-than-expected tax collections will add hundreds of millions of dollars in revenue beyond what was estimated just last month.

While the news is good, NJBIA President and CEO Michele Siekerka noted that the Murphy administration was still seeking a tax increase this year, and that the state’s long-term finances contained huge pension and health benefit liabilities that still need to be addressed.

“The state tax collections announced today are encouraging, but not necessarily surprising considering the strength of the national economy, coupled with a Corporate Business Tax rate increase last year that is now second highest in the nation and is bringing in record receipts for the state,” Siekerka said.

“What is surprising, in light of this windfall, is the continued call for even more taxation as part of the FY 2020 budget proposal,” she added. “Clearly, this additional revenue is more justification to not increase the Gross Income Tax rate on those making over $1 million, as proposed, as it will further hurt our competitiveness in the region.

“The question needs to be asked: If we’re continuing to overtax our residents and businesses during an economic upswing, what will happen during an eventual economic downturn?

“New Jersey still desperately needs structural reforms that comprehensively address underfunded pensions and right-size health benefit costs,” Siekerka said. “We must remember the proposed overall budget is increased by 3.2 percent from the current fiscal year and 11.2 percent from FY 2018. It is important that the state focuses on fiscal responsibility rather than additional spending.”

Testifying in the afternoon before the Senate and Assembly budget committees, State Treasurer Elizabeth Maher Muoio said the total revenue forecast for the fiscal year that comes to a close June 30 has been revised upward by $377 million and there will be back-to-back surplus balances of over a billion dollars for both FY2019 and FY2020. Muoio also announced the Murphy administration will deposit $317 million in the state’s rainy day fund for FY2019.

Earlier, The Office of Legislative Services (OLS) predicted a two-year revenue increase of $533 million to the forecasts for fiscal years 2019, which ends June 30, and 2020.

The OLS revenue estimates included a $420 million increase in estimated income tax collections over what it predicted in April. OLS is now expecting the state to collect almost $16 billion in income taxes ($15.95 million). The month also saw a surge in Corporation Business Taxes ($41.3 million), petroleum products gross receipts ($28.1 million) and the sales tax ($13.6 million).

6 responses to “Despite Surging Budget Surplus, Administration Still Seeks Tax Increase”

  1. Melody Singer says:

    This is a good first step in destroying businesses, but it’s not enough. Raise the gas tax another 50 cents, raise the top income tax rate to 13% and let’s redirect school funding to help illegal criminal aliens so property taxes can skyrocket some more. The dumb voters of the state voted all democrat so raising taxes are the will of the people. Murphy and the Democrat must give the dumb voters what they want.

  2. Fred says:

    Funny accounting. Redirecting gas tax revenue dedicated for infrastructure capital projects to cover O&M expenses artificially creates surplus! No meaningful construction projects have been accomplished with the billion dollar gas tax revenues and the fake surplus will be spent on more government programs and bigger government. Just keep feeding the PIGS, ruin the state economy, stay in power with your power to tax & spend addiction. When will adults ever be elected to NJ government?

  3. Thomas W. says:

    What part of the DemocRAT party is for the people? The state subsidizes illegal aliens education, it injects itself into a variety of businesses employee compensation issues, it seems to have no priorities in spending other than spending.

    Until the people start paying attention to the individuals running for office, setting aside the party lines, the state will continue to end up with egos in lieu of leaders. Our state officials spend more time on gimmicks then substance; i.e. SALT cap workarounds.

  4. John says:

    Thank You New Jersey more great news I have been trying to convince my wife to getting out of this state only getting worse if they put a millionaire tax in I will definitely be leaving with or without my wife can’t take it anymore between the Dumbs running things and the very corrupt water utilities and insurance company all my partners

  5. Ronald Ferrarotti says:

    The gas tax was to be for infrastructure. – isn’t any other use illegal? We have robocallers (Mendez’s new crusade). Now we can add robotaxers. The only legal way is impeachment.

  6. john carney says:

    The art of taxation is plucking the most amount of feathers with the least amount of hissing ……We have no feathers left……Government workers get paid until death and even then have fowarded their pay to family until they are dead …..Get heathcare until death …..Regular nongovernmental workers get to payall these benifits with out getting anything…..WE DO GET MORE IDIOTS RUNNING A GOVERNMENT EXTORTION RING …..IT WILL NEVER END ….