From the Courier Post:
New Jersey faces a projected budget deficit of $8 billion in its next fiscal year, as well as a shortfall of more than $2 billion in its unemployment compensation fund, a report said Tuesday.
The independent Office of Legislative Services estimated the shortfall at the request of Senate Republicans — and GOP office-holders greeted the $10-billion figure with calls for a special legislative session to address state finances.
David Rosen, the OLS’ budget and finance officer, in April told lawmakers the state was facing the worst revenue plunge in “modern history.”
Tuesday’s estimate predicted the unemployment compensation fund’s deficit would rise from $2.2 billion to $3.5 billion over the course of fiscal year 2011.
The gloomy projection came just weeks after Corzine signed a $29 billion budget that initially faced a deficit estimated at $6 billion.
When he signed the budget, Corzine noted it was nearly $4 billion smaller than the spending plan enacted for the previous year.
New Jersey faces a projected deficit of $8 billion next fiscal year, even after cutting $4 billion of spending and raising taxes this year to close a budget gap, the nonpartisan Office of Legislative Services said.
The state would need $2.5 billion in fiscal 2011 to fully fund pension contributions and will lose $1.6 billion of federal stimulus money, David Rosen, the office’s chief budget analyst, said in a July 20 memo to Senate Minority Leader Tom Kean. It also faces $1.1 billion in expiring tax increases, Rosen said.
Rosen predicted a total of $8.8 billion in spending growth and revenue losses, which would be offset by an $800 million increase in collections from major taxes including those on sales, personal income and corporations. “This figure represents growth below normal growth rates, but would be the first year of growth following two years of decline,” he wrote.
The office’s projection comes about three weeks after Governor Jon Corzine signed a $29 billion budget for fiscal 2010, which began July 1. That plan trimmed spending the most in state history while raising taxes on cigarettes, wine, liquor and the wealthy to close a deficit of $8.8 billion.