N.J. lawmakers hear sharply different revenue predictions

TRENTON - As the Legislature moves toward adopting a new budget, the Christie administration and a nonpartisan budget analyst offered starkly differing projections Monday of how much revenue the state will take in.

The Office of Legislative Services' budget and finance officer, David Rosen, testified before the Senate Budget and Finance Committee that revenue will fall short of Gov. Christie's projections by $937 million.

But state Treasurer Andrew Sidamon-Eristoff told lawmakers a short time later that the shortfall this year and next would be about $165 million and that adjustments in the budget for the fiscal year ending June 30, 2014, will more than make up for the difference.

Christie, who was touring Shore areas Monday to highlight the state's restoration efforts following Hurricane Sandy, criticized the OLS estimate, contending that the nonpartisan agency had either miscalculated or thrown in its lot with the governor's Democratic critics.

"I don't know, candidly, whether he's just lost it or just playing politics," the governor said. "He's dead wrong, and he's been dead wrong before."

Rosen has defended his revenue projections and described Christie's as inaccurate.

Given the size of the governor's proposed budget, the difference in revenue projections of $772 million is not as dramatic as the absolute numbers suggest. It amounts to just over 2 percent of the governor's overall budget of $33 billion.

But because the state's finances are so tight, any shortfall can make for even more difficult choices. One of them was discussed briefly Monday when Jeff Brindle, executive director of the state Election Law Enforcement Commission, told the committee that its 14-year-old computer system increasingly was malfunctioning and needed a $2 million update.

The gap in projections, moreover, generated some partisan fireworks Monday.

Senate Budget Committee Chairman Paul Sarlo (D., Bergen) called one set of revenue projections by the Christie administration - $180 million from the introduction of Internet gambling - a "bogus number."

And expected Democratic gubernatorial candidate Barbara Buono sought to seize the advantage, arguing for increasing taxes on those with higher incomes and saying Gov. Christie was attempting to deflect bad budget news by blaming the OLS.

"Rather than delaying funds designated for property tax relief, the governor should make millionaires pay their fair share and ease the burden on working and middle class families," Buono said in a statement.

According to Rosen, the biggest drop-off in revenue was in utility and casino taxes.

Energy sales taxes, paid by utility companies, will come in $348 million below the governor's projection of earlier this year, the OLS said. Both Rosen and the Christie administration, which agreed that utility taxes would decline, attributed the drop-off to lower energy usage as a consequence of Sandy, ongoing energy efficiency measures, and declining natural gas prices.

Rosen said the state likely will take in only $30 million from the start of Internet gambling in the coming fiscal year, about $150 million below the administration's estimate. He also voiced skepticism about the ability of the state to retrieve $150 million-plus in fees paid by developers to municipalities for the construction of affordable housing.

The Christie administration, acting under legislation signed by Gov. Jon S. Corzine authorizing the taking of the affordable-housing money, began the process of seizing those funds several weeks ago. Municipalities sued and won a temporary court order blocking the state from taking the money. The state is preparing its own legal response.