On May 14, the New Jersey State Treasurer reported higher-than-expected revenues, revising the budget projections for the upcoming fiscal year and increasing the state’s projected cash reserves. While the higher than expected tax returns and upward revisions in revenues are a welcome development, the increase is not enough to eliminate the state’s underlying structural deficit, which remains close to $1 billion even after the governor’s proposed revenue increases and spending reductions.
In response, New Jersey Policy Perspective (NJPP) releases the following statement.
Peter Chen, Senior Policy Analyst, NJPP:
“New Jersey’s higher-than-expected income tax receipts reinforce what NJPP research has long shown: A robust, progressive income tax code can generate the sustainable revenue needed to fund public goods and services that residents depend on — from strong public schools to reliable transit.
“Although this revised forecast is encouraging, it does not close the gap between what the state collects and what it proposes to spend. A structural budget shortfall of approximately $1 billion remains, and without bolder progressive revenue solutions, New Jersey will draw down its limited surplus and weaken its ability to respond to looming federal cuts to Medicaid, food assistance, and infrastructure, harming hundreds of thousands of people. As the Treasurer and the Office of Legislative Services testified, the state stands to lose billions in federal funding and faces substantial exposure to an economic recession.
“The path forward is clear: Lawmakers must build on the governor’s budget by strengthening progressive revenue measures that ask the wealthiest to pay their fair share. Without doing so, the state will be left with dangerously thin reserves if revenue reductions come to pass. Robust, equitable revenue is the only way to protect essential services and build a more resilient future for all New Jerseyans.”
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