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Treasury: NJ revenues off $426M through 6 months

Angela Delli Santi, Associated Press

TRENTON, N.J. (AP) -- Revenue collections in New Jersey are running $426 million below the budgeted amount through the first six months of fiscal year 2013, the Treasury Department said Tuesday.

Tax and fee collections for December exceeded the budgeted amount by $25 million, but revenues remain off by 4 percent halfway through the fiscal year, the department said.

"This shows that our expectations for the year were not cautious; they were too optimistic to be met," said Assembly Budget Committee Chairman Vincent Prieto. "The trends before (Superstorm) Sandy are still the same."

Lawmakers worry that the storm, the worst natural disaster in New Jersey's history that has caused $36.9 billion in damage, mitigation and prevention costs, will financially strain hard-hit towns and the state because of lost tax revenues. Those towns, lawmakers fear, will look to the state for additional aid. Rutgers University economists predicted a bit of a silver lining in a report released this week: a small economic boom because of the many construction jobs the recovery will create.

Gov. Chris Christie's $31.7 billion annual budget relied on revenue growth of more than 7 percent for the year, the highest forecast of any state. So far, collections of most major taxes haven't neared the amount projected.

Income tax collections are $100 million higher than the amount budgeted, but sales taxes are off by $189 million for the year so far and corporation business taxes are off $189 million. Casino revenue is $36 million below estimates.

The shortfall could necessitate midyear budget cuts to keep the state's budget in balance as required by law.

Christie is scheduled to deliver his annual budget message on Feb. 26. That address will lay out a fiscal blueprint for the budget year that begins July 1, but it might also address lingering shortages in the current year.

Prieto said the state budget picture is actually worse than the midyear summary suggests because those figures don't count a year-end shortage of $123 million that was carried forward from June into the current fiscal year. Added together with the current-year revenue lag, the actual budget shortfall is $549 million, Prieto said.

The current budget contains $648 million in surplus, including $183 million that was to fund the first phase of Christie's proposed tax cut. Democrats insisted on leaving the money in surplus at least until January to see if the state was hitting the administration's aggressive revenue targets.

Even Christie acknowledges that there is virtually no way Democrats would agree to release the tax cut funds now.

If the current trend continues, all but $99 million of the available surplus would be used to plug the budget hole unless spending cuts were to be imposed.