New Jersey Now Has $1.1B Budget Hole As Debt, Pension Crisis Looms

New Jersey faces a $1.1 billion budget hole over two fiscal years just as the state's debt and pension crisis has become dire, officials said.

If the state doesn't find the money by the new fiscal year, budget gap could lead to cutbacks in the state's pension fund and a scaling back of services and programs as New Jersey finds ways to roll back its growing debt.

Just don't expect an increase in taxes; Gov. Chris Christie, who is suffering from the worst popularity ratings among any New Jersey governor in 26 years, has ruled that out.

In memo reported by Politickernj.com, the Office of Legislative Services forecasted that the state will collect $1.1 billion less in taxes than the Christie administration had predicted, and his $34 billion budget proposal will have a $487 million shortfall.

The Christie administration will now have to scramble to find $487 million before the 2015-16 fiscal year ends June 30, and nj.com reported that there's little left in the treasury this late in the fiscal year.

The OLS is scheduled to testify before the Assembly Budget Committee on Wednesday about the proposed 2016-17 $34.8 billion budget, which is supposed to take effect by July 1.

The news comes as a Pew Charitable Trusts “Fiscal 50” report put New Jersey among the nation’s most indebted states across several categories.

New Jersey ranks third worst in total debt, as well as third worst in both unfunded pension and unfunded retiree-healthcare costs.

New Jersey ranked third in total debt with more than $35 billion, following California, with debt $94 billion, and New York, at $63 billion.

In the memo, a copy of which was also obtained by The Record, a budget analyst wrote that OLS had lowered its two-year revenue estimate by $943 million for the current fiscal year and fiscal year 2017, which begins in July.

This estimate was made after measuring tax collections for "the important spring filing season," according to The Record.

"Almost all (93 percent) ... can be ascribed to the recent performance of the gross income tax," wrote Catherine Brennan, an OLS analyst in The Record report.

Christie reduced pension payments by billions over the past two years to balance state budgets, prompting an outcry from public unions who say the governor reneged on his first-term pledge to fund the pension system.