NJ Budget Forecast: "When You Wish Upon a Star..."

"Makes no difference who you are

Anything your heart desires

Will come to you."

 -  Pinocchio

In the Disney adaptation young Pinocchio's nose grows longer when he lies, but with help from the blue fairy all ends well for him. The State of New Jersey however is not a Disney movie, and wishing upon a star is not enough to create a sound budget forecast. It may even make one's nose grow longer.

In March the nonpartisan Office of Legislative Services (OLS) estimated that for the current fiscal year ending in June 2012 the Governor's tax revenue budget was off $145 million and for the new year ending in 2013 it was off by $392 million - a total of $537 million. Then a week ago Senate Budget Chair Paul Sarlo estimated Christie administration and the OLS were about $850 million apart on revenue projections. Now with more data on April results, OLS Director David Rosen in an email to legislators is predicting revenues will fall $1.3 billion short of the Christie administration's projections. By any standards that is a lot money. It exceeds what is in the 2013 $32.4 billion budget for the tax cut, fund balance (surplus), plus, several entire departments.

The administration's forecast was initially called into question in February by an S&P analyst who said the budget was "structurally unbalanced because it is built on "optimistic" economic-growth projections." Just yesterday Moody's said, "New Jersey's fiscal 2013 revenue growth will likely remain muted given recent tax revenue trends and our expectation that the state's economic recovery will lag the U.S." For more about the problem go here.

Today (Wednesday May 23) before the Assembly Budget Committee at 10 AM OLS Director David Rosen and at 1:00 PM State Treasurer Andrew Sidamon-Eristoff will present their separate budget revenue updates. The event will be broadcast live here or you can watch it on NJTV.

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