New Jersey saw increases in its general fund revenues in the 2018 and 2019 fiscal years but is expecting a smaller boost this year.
The Garden State saw a 4.9 percent increase in Fiscal Year 2018 revenues and a 6.9 percent increase in 2019 revenues, according to an analysis from the National Association of State Budget Officers (NASBO). Lawmakers expect a 0.6 percent increase this year.
New Jersey took in more than $10.8 billion in sales tax in 2019, below their original estimate of about $11 billion. The state also took in about $15.9 billion in personal income tax revenue, about $60 million less than anticipated.
The state saw an increase in corporate income tax revenue, taking in nearly $4.3 billion in 2019 as opposed to the original estimate of about $3.3 billion.
Despite seeing some revenues below expectations, the Garden State is taking in increased tax revenues.
In 2020, the state anticipates receiving more than $11.1 billion in sales tax, an increase from nearly $10.5 billion in 2018. Meanwhile, the state is projected to take in $3.6 billion in corporate income taxes in 2020, up from almost $2.5 billion in 2018.
Nationally, state lawmakers are spending more money and also replenishing rainy day funds in preparation for the next economic downturn, according to the report.
New Jersey had no rainy-day fund balance in 2018, but that number increased to $401 million in 2019, where it stands in 2020.
General fund spending is expected to increase by 4.8 percent in the 2020 fiscal year, the NASBO analysis found. In total, 45 states are planning spending increases, which are predicated on general fund revenue growth of 2.6 percent.
The Garden State is no exception to the trend. In 2018, the state spent $35.7 billion, a level that is increasing to $38.4 billion in 2020.
On the tax front, lawmakers in New Jersey made several changes to the state’s tax structure. New Jersey, along with California and Ohio, approved an expansion of its earned income tax credit (EITC).
The state also enacted several changes in aid to local governments for the 2020 fiscal year, including a $1 million decrease in transportation aid.
The state added a new $4 million grant program for urban parks, while aid grants for school lunches remained at $5.6 million. The state also increased by 5.9 percent or $12.4 million for employee benefits on behalf of local governments.
The state is also increasing funding to distressed municipalities under the Transitional Aid program and Trenton City Capital Aid by 19 percent or $19 million. The state also added $12 million in new programs targeted at municipal shared services and consolidation for Hamilton Township.