Thomas Koeing, Legislative Budget and Finance Officer for the State’s Office of Legislative Services (OLS), provided a budget overview and revenue forecast. Mr. Koeing revealed that the combined state revenues for Fiscal Year 2023 and Fiscal Year 2024 will fall $1.055 billion below Governor Phil Murphy's latest budget proposal. This shortfall in projected revenues could lead to budget cuts or increased taxes to make up for the deficit.
The discrepancy in predictions largely stems from the state's largest revenue sources: gross income taxes, corporation business taxes, and sales taxes. OLS estimates are $374.7 million, or 0.7%, below executive estimates for Fiscal Year 2023, but the discrepancy is more pronounced for Fiscal Year 2024, where OLS estimates fall $680.2 million, or 1.3%, below executive estimates.
State Treasurer Elizabeth Maher Muoio provided a budget overview and testified that the FY 23 revenue growth had exceeded expectations in the first half of the fiscal year, with a revised forecast of $54.1 billion, though some economic uncertainties are looming in the coming months, such as higher interest rates affecting the housing market, consumer behavior, and the banking industry.
State Treasurer Muoio presented the revenue forecasts for various taxes and non-tax sources, including Gross Income Tax, Sales Tax, Corporation Business Tax (CBT), and Pass-Through Business Alternative Income Tax (PTE/BAIT). She explained that while some tax collections have declined slightly, she expects the weakness in collections affecting the end of FY2023 to continue into the next fiscal year.
Despite these challenges, Muoio highlighted positive points related to the FY2024 budget proposal, including a growing ending surplus and a structural surplus. She emphasized that the proposed budget is designed to maintain fiscal stability and support economic growth in New Jersey.
During the hearing, Senators Sarlo, Ruiz, O’Scanlon, Oroho, Testa, and Steinhardt questioned the State Treasurer on the increase in the State Health Benefits. State Treasurer Muoio noted that their testimony last year noted that health benefits utilization was increasing, and they received the rate renewal report in June.
The League will continue to monitor the budget hearings and continue to report back to you.
Contact: Andrew LaFevre, Legislative Analyst, firstname.lastname@example.org, 609-695-3481, x116.