New Jersey is Expected to Collect a Record $51 Billion in Tax Revenue in 2022

Alex Nesterenko | Updated: 07-10-2022 11:01 IST | Created: 07-10-2022 11:01 IST
New Jersey is Expected to Collect a Record $51 Billion in Tax Revenue in 2022
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According to an email acquired by NJ Advance Media, New Jersey's Office of Legislative Services anticipates the state will receive roughly $4 billion more than it predicted last month for the 2022-2023 fiscal year.

OLS's updated revenue predictions, which were provided to the state Senate Budget Committee on May 16, and the state Assembly Budget Committee on May 18, were provided to policymakers in advance by David Drescher, section head for revenue, finance, and appropriations at OLS.

The OLS expectations for total State revenues for the two fiscal years combined are nearly $3.7 billion above the projections in April, according to information provided by Drescher in an email to legislators. This rise is mostly the result of an April gross income tax payment spike that was historically large.

Gov. Phil Murphy's administration predicted it would likely receive about $5 billion more in taxes than it had anticipated at the start of the FY in July 2021 when it announced its $48.9 billion state budget plan in early March.

OLS predicted the state would bring in around $48 billion at budget hearings in April, which was nearly $2.5 billion more than Murphy's projections.

By the end of June, analysts at OLS now forecast that New Jersey would bring in roughly $51 billion, according to the information that NJ Advance Media was able to acquire on May 13.

Thomas Koenig, OLS Budget and Finance Officer, told legislators during his testimony in April that Murphy's budget proposal may not be supported in the long term by tax dollars since it depends on surplus income in order to be balanced.

When the surplus reaches $4.6 billion, according to Koenig, a budget that counts on a $1.7 billion surplus cannot be maintained over the long term and remain balanced.

Although experts on tax and budget have frequently advised state officials to exercise care as they work out the state budget in 2022, the most recent increase in income predictions may allay some of those worries.

According to Lucy Dadayan, senior research associate at the UBTPC and director of the State Tax and Economic Review Project, the majority of states nationwide are seeing double-digit revenue increases that won't sustain.

According to Dadayan, a variety of temporary stimulants, such as an uncommon federal stimulus program and skyrocketing consumer goods prices, seem to have created an increase in state tax collections during the previous several years.

New Jersey’s State Revenue and Economic Trends

State and local general revenues in New Jersey totaled $109.4 billion in FY 2020 or $11,792 per person. General national revenues per person were $10,933. New Jersey collects all significant municipal and state taxes. Property taxes ($3,431) and federal transfers ($2,158) made up the majority of New Jersey's per-person income. In 2020, 29% of the state and municipal general revenue of New Jersey as a whole was made up of property taxes. NJ was the second-most property-dependent state. The state has been unable to come to a compromise on property tax reform despite ongoing discussions. One of the most profitable industries of the past decade was the online gambling market, with 29 legal casino sites in New Jersey contributing $144.51 million in state tax revenue in FY 2020.

(Disclaimer: Devdiscourse does not promote any kind of gambling activities and urges readers to play responsibly if they choose to do so. Devdiscourse's journalists were not involved in the production of this article. The facts and opinions appearing in the article do not reflect the views of Devdiscourse and Devdiscourse does not claim any responsibility for the same.)

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