New Jersey’s budget shortfall for the current fiscal year widened to $3.6 billion from a projection of $2.1 billion a month ago, prompting Governor Jon Corzine to call for unpaid days off to help close the deficit.
State revenue collections fell $526 million short of budget estimates last month, Treasurer David Rousseau said in a statement today. Through January, total revenue is $1.33 billion under target for fiscal 2009, which ends June 30.
“We are flat-lining with regard to revenue,” Corzine, 62, said to reporters in Trenton. “We’re going to have to make some substantial adjustments” to the state budget, he said.
Corzine said his administration has identified $472 million in additional spending cuts to help balance the budget. Those reductions include forcing state workers to take two unpaid days off in May and June, for savings of $35 million, he said. He also said the state will conduct a $100 million “tax amnesty” to entice delinquent taxpayers to settle up.
The governor said the shortfall includes a $2.8 billion deficiency in revenue and an additional $800 million in spending needs. Among those needs is a replenishment of the state’s unemployment benefits fund to prevent a statutory tax increase on employers, he said. The state will put $270 million into that fund to cover increased claims, Corzine said.
Rousseau said the state won’t sell any debt to fill the deficit, refinance bonds or miss payments.
For January, revenue totaled $2.4 billion, which is nearly 18 percent under target, Rousseau’s statement said. The gross income tax was $229.9 million, or 13.8 percent, below projections, the sales tax was $119.9 million, or 20 percent, below estimates, and corporation business tax collections totaled only $13.7 million, which is $111.2 million, or 89 percent, under projections, the statement said.
“The national recession has delivered another punch to New Jersey’s gut,” Louis Greenwald, a Cherry Hill Democrat who chairs the Assembly Budget Committee, said in a joint statement with Assemblywoman Nellie Pou, a Paterson Democrat. “We are going to make the tough decisions to keep the current year’s budget balanced without the need for tax increases.”