It seems strong holiday shopping has given New Jersey another big fiscal stimulus.
The latest revenue figures released by the Treasury Department show that brisk consumer activity in December helped boost government sales taxes by nearly $ 190 million a year.
Such impressive performance by one of the state’s largest sources of revenue came after a strong November, when sales tax collection also rose nearly $ 100 million from last year.
Aggregate revenue collection from all major state tax sources increased in the first seven months of fiscal year, which began in July, by more than $ 4 billion over the same period last year, the Treasury Department said Monday.
The steady growth of revenues has provided a significant cushion for the state budget, which is heading into the always important spring season of income taxes.
Extension for two weeks
The new revenue figures were released when lawmakers in the Assembly and Senate on Monday voted to extend Gov. Phil Murphy by two weeks to present his budget for the fiscal year beginning July 1.
Murphy requested an extension to allow a personal budget announcement on March 8 this year after a coronavirus pandemic failed to hold such an event last year.
Republicans on Monday wondered if an extension was needed given the improved level of new COVID-19 infections in the state. They also expressed concern that delaying the governor’s budget announcement could lead to an even less transparent approval process than last year, when most Democrats waited until the last minute to publish a bill that includes all Murphy’s proposals and their own budgets. .
New Jersey sales tax revenue is reported to the state lagging behind, and new figures announced by the Treasury Department on Monday for January actually cover consumer activity that occurred in December, officials said.
Overall, strong consumer activity recorded in November and December helped increase overall government sales tax collection by $ 720 million in the first seven months of the fiscal year compared to the same period last year.
The sales tax is the second largest source of tax revenue in the state budget, but the largest that supports the general budget fund. Income tax is the state’s largest source of revenue, but all revenue under the constitution is intended only to fund programs that ease pressure on local property tax accounts, such as K-12 education assistance and residential property tax relief programs. So far this fiscal year, sales tax revenues have grown by more than 12% over the same period last year, well ahead of the Treasury Department’s forecast that by the end of June they will barely surpass last year’s results.
Meanwhile, income tax collections also still far exceed last year’s results for the first seven months of the fiscal year. Fees in January were up 15% from the same month last year, and they were up more than 20% in the first seven months of the fiscal year.
Going forward to collecting income tax?
However, Finance Ministry officials predict that by the end of June there will be a slight decrease compared to the same period last year. They note that the tax breaks associated with a fairly new “workaround” tax policy for owners of many small businesses in New Jersey and other transition organizations have not yet been paid in full.
A number of tax cuts passed from the budget ahead of Murphy’s re-election last year are also expected to affect income tax revenues as they begin to be claimed by eligible residents when they file tax returns ahead of April. The application deadline is, Treasury officials said.
Republican lawmakers have suggested that the current surge in revenue is likely to continue until the end of the fiscal year, despite the administration’s projections of an impending decline. When they opposed allowing Murphy to postpone the presentation of the new annual budget, Republican lawmakers said Monday that such a scenario should justify more time to discuss the budget ahead of the start of the new fiscal year. the less.
“Make the governor do what he has to do, and don’t give him an extra two weeks, which will lead to delays and really refuse public participation in the process,” said MP Brian Bergen (R-Morris).
Majority Democrats objected that lawmakers had in the past given deferrals to governors from both parties. They also suggested that the extra time could lead lawmakers to get more up-to-date fiscal data for consideration in future budget discussions.
“This will allow us to have better numbers when we start our budget process,” said Assembly Committee Budget Committee Chair Eliana Pintar Marin (D-Essex).