From the Record:
Governor Corzine will announce new spending cuts early next month, his response to a recession-fueled budget deficit that is now $459 million and likely heading to well over $1 billion.
Thanks to another bleak report on state revenues released Tuesday, Corzine said the budget deficit — and a series of new spending cuts — could total more than the $1.2 billion he predicted just last month.
“We need to find at least $1.2 billion and, as I have talked about, if we are in error, it will probably be larger numbers as we go forward if we sustain the kind of declines in revenue that we’ve been seeing the last two months,” Corzine said Tuesday in Trenton.
November’s revenue report indicates state tax collections came in about $200 million below the projections included in the $33 billion spending plan Corzine and the state Legislature approved this summer. Revenue collections in October also came up short, by $211 million.
In all, state revenue collections are $459 million behind original budget estimates for the first five months of the fiscal year that began on July 1.
“They are very indicative of a weakening economy,” Corzine said.
About $400 million has already been cut in response to the declining revenue and the governor has asked department heads to find another $600 million. He said those cuts and at least $200 million more will be detailed in January.
“We will be out very early in the New Year with the specifics on this,” he said. “We’ve had an ongoing serious scrub of every element of our budgetary options.”
“We’re making adjustments in spending as we speak,” he said.
The total revenue shortfall of $459 million marks a 4.2 percent gap between the $10.57 billion that was collected and what was projected for the first five months of the fiscal year.
The state’s three major revenue sources — the corporate, income and sales taxes — are all seeing deficits between 2 percent and 5 percent.
“These revenue numbers paint a sobering picture of how the deepening economic downturn is impacting New Jersey jobs, businesses, personal income and consumer spending,” state Treasurer David Rousseau said.