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Bigger Shortfall, Bigger Cuts

Biz BriefsIt’s official. New Jersey is going to receive about $440 million less in revenue than anticipated this year, according to updated budget projections reported last week by state Treasurer Bradley Abelow. The largest gaps relate to income and corporate business taxes, which are expected to fall short by a total of $300 million when the fiscal year ends June 30, he announced last week. The shortfall will make it harder for the Legislature to scale back Gov. Jon Corzine’s proposed hikes on sales, cigarette, hospital and water taxes. In addition, the administration will have to make more cuts to balance Corzine’s proposed $30.9 billion budget for the fiscal year beginning July 1.

For starters, the administration will delay by one year a plan to exempt 400,000 low-income residents from income taxes and to reduce taxes for 200,000 others. The administration is also scaling back various Corzine initiatives: a program for students with autism or other special needs, after-school programs and a plan to build child-advocacy centers. Proposed increases in aid to homeless shelters and for repairs to state parks will also be trimmed. The deadline to adopt the spending plan is June 30.

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