The state Treasurer told lawmakers this week that strong spring tax collections mean New Jersey will end the FY25 budget year next month with $388.5 million more than originally forecast and can anticipate $323.2 million more revenue in the FY26 budget year.
In testimony before the Assembly Budget Committee on Wednesday, Treasurer Elizabeth Maher Muoio said the state now projects total revenues of $55.3 billion for the current fiscal year driven primarily by higher collections from the Gross Income Tax and the Pass-Through Business Alternative Income Tax (PTBAIT). For the FY26 budget year that begins July 1, Muoio said the state projects total revenue to be $57.1 billion.
"We will enter the new fiscal year with a solid foundation, while keeping an eye on national and international economic developments,” Muoio told the committee. Muoio noted potential federal funding cuts could mean the loss of billions of dollars and the impact of tariffs and could also affect New Jersey’s “port-based economy.”
The higher-than-expected revenue forecasts mean legislators on the Assembly and Senate budget committees now have decisions to make about the $1 billion in proposed new or expanded taxes that Gov. Phil Murphy asked for in the FY26 budget plan now under review as well as proposed spending cuts impacting higher education, manufacturing, workforce development and innovation.
NJBIA Chief Government Affairs Officer Christopher Emigholz said Thursday he hoped the good news about the improved revenue forecasts makes it more likely that the Legislature will be able to restore the manufacturing and higher education spending cuts that undermine economic growth, and/or cut back on the governor’s proposed tax increases.
In her testimony, Muoio said April revenue collections for the major taxes totaled $7.386 billion, up $444.9 million, or 6.4% ahead of last April. Robust growth in the Gross Income Tax offset a decline in the Corporation Business Tax (CBT). Fiscal year-to-date, total major revenues of $38.449 billion are running higher by $2.048 billion, or 5.6% above the same period in 2024.
April collections for the GIT, which are dedicated to the Property Tax Relief Fund, totaled $4.246 billion, up $670.4 million, or 18.7% higher than last year.
The Sales and Use Tax (SUT), the State's largest General Fund revenue source, totaled $1.327 billion, an increase of $46.7 million, or 3.6% over last April. Fiscal year-to-date collections of $10.195 billion are now running $348.6 million higher, or 3.5% above last year.
The CBT, the second largest General Fund revenue source, totaled $1.012 billion in April, a decrease of $226.9 million, or 18.3% below last year. While the state due date for CBT final payments is not until May, April remains a key final payment month as companies continue to make payments and file returns according to the federal schedule.
CBT final payments totaled $585.2 million in April, falling by $175.2 million, or 23.0% below last year. April also marks the first due date month for estimated payments for Tax Year 2025, which were down by $68.3 million, or 17.5%.
Pass-Through Business Alternative Income Tax (PTBAIT) payments totaled $550.5 million in April, up $90.4 million, or 19.6% above the same month last year. Estimated payments totaled $518.3 million, higher by $77.8 million, or 17.7% compared with last April. Fiscal year-to-date revenues of $3.818 billion are now up $282.1 million, or 8.0 % above last year.
