The Legislature received testimony regarding State revenues earlier this week. In separate appearances before the Assembly Budget Committee and the Senate Budget and Appropriations Committee, the State Treasurer and the Office of Legislative Services (OLS) testified regarding the revenue picture for the current fiscal year (FY 2017), and the anticipated revenues for the upcoming fiscal year (FY 2018).
The OLS reported to the Committees that incoming revenues for FY 2017 are currently forecasted to be $228 million less than expected. However, the 2016 financial market rally and estimated tax payments by high-income earners suggest that FY 2017 revenues could push closer to the originally forecasted amounts. A more accurate revenue forecast will be available in May, after the April tax filing deadline passes.
For FY 2018, both the Executive Branch and the OLS have similar projections for growth in the upcoming fiscal year. The Executive Branch anticipating growth that is only 0.6 percent higher than the OLS. While a small percentage amount, this still results in a difference of $212.9 million between the Executive Branch and OLS revenue estimates.
In all, the State of New Jersey faces another tight fiscal year. As the Governor’s Budget in Brief shows, of the estimated $35.5 billion State Budget in FY 2018, only 12 percent ($4.3 billion) is for governmental functions of the executive, legislative, and judicial branches. The majority of the State Budget, 72 percent ($25.5 billion), is provided as State Aid and Grants-in-Aid to local governments and direct State services to the public. The remainder of the Budget is for debt service, 7.8 percent ($2.8 billion), and State employee benefits, rent and utilities, and capital expenditures, 8.2 percent ($2.9 billion).
We will continue to monitor the updated revenues for the current fiscal year and the development of the State Budget for FY 2018.