State Budget Gap Widens

With less than five weeks until the end of the budget year, state officials are working to plug a $325 million gap in the state’s fiscal 2010 budget.

“In total, we are reducing our revenue forecast for FY 2010 by $325 million,” state Treasurer Andrew Sidamon-Eristoff said Tuesday before the Senate Budget and Appropriations Committee.

State budget officials plan to make up the shortfall through cuts and by shifting some expenses from one budget year to another. That amount will come from the state’s “rainy day” surplus, and from cuts in areas of the budget such as business incentives, the state’s disability benefit fund, higher education debt service.

There was no mention of any impact on public school funding.

The budget shortfall is driven in part because income and sales taxes have fallen short of projections. Other anticipated revenues have fallen flat, as well. For instance, the state collected $13.6 million less in funds expected from taking school district surpluses earlier this year. In addition, New Jersey budget officials last week discovered they had underestimated by as much as $300 million the amount that Garden State residents who commute to New York could write off as a credit on their New Jersey tax bills.  

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