How NJ's Plummeting Tax Revenue Will Impact Your Budget

NEW JERSEY — State tax revenues dropped last month by almost 20 percent, higher than treasury officials were expecting, and while the administration does not see a boost in revenue collections coming this year, no one is pressing the panic button.

Revenue collections in May dropped $641.8 million, or 19.6 percent from last May according to new figures from the NJ Department of the Treasury.

“Treasury had anticipated a decline from last year’s revenues, but of a smaller magnitude,” said State Treasurer Elizabeth Maher Muoio’s office on Thursday.

“Revenue collections are projected to remain soft through the remainder of the fiscal year,” the treasurer’s office added. The next fiscal year will begin on July 1.

The state is projected to collect $1.2 billion less this fiscal year than it did in 2022, state treasury officials have said. The news comes as legislators continue hammering out provisions of Gov. Phil Murphy's proposed budget, including a proposed "StayNJ" property tax break for senior homeowners which is projected to cost $300 million in its first year.

Despite the projected loss, officials have not started ringing alarm bells about major changes to next year's budget. Muoio’s office has said the state is still in a tenable financial position, with an estimated $10 billion surplus. In May, Muoio said the state faces "no crisis" and has planned well for the "momentary revenue weakness," in front of the New Jersey Assembly Budget Committee.

Revenues from gross income tax dropped by 55.3 percent from last May, mainly caused by an increase in property and income tax refunds. Gross income tax revenues, which are dedicated to the Property Tax Fund, decreased $569.7 million from last May.

The sales and use tax, which is the largest general fund revenue source, declined $21.0 million, or 2.1 percent from last May. This is the first month the SUT fund registered negative year-over-year growth since July 2020, the treasurer’s office said.

And the Corporation Business Tax, which is the second-largest source of revenue for New Jersey’s general fund, declined $135.4 million, or 44.9 percent from last year.

Looking at year-to-date collections, the NJ Treasury says it has collected $39.750 billion in revenue thus far this year, which is 2.6 percent off the collection amount from this time last year (a decrease of $1.065 billion).

See more detailed numbers below, or click this link to open the PDF in a new window.

New Jersey Treasury Monthly Revenue Report With Snapshot-FY23May by Michelle Rotuno-Johnson on Scribd