New Jersey’s tax revenues have continued to slide in the new fiscal year, according to recently published figures.
The state pulled in $4.8 billion in taxes in September, New Jersey’s Department of the Treasury said in its monthly revenue report, a year-over-year decline of 5.1% for the month and drop of 6.2% for the first three months of the fiscal year.
The department said lower quarterly estimated payments and higher refunds for the state income tax was the biggest factor. September income tax collections were off 10.1% year over year, and down 7.2% for the first quarter of the fiscal year.
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Corporation Business Tax earnings were down 6.3% year-over-year for September and 14.6% for the fiscal year to date.
“All CBT revenue components are lower on a year-to-date basis, led by a decline in partnership return collections, while refunds are higher,” officials said.
New Jersey’s largest source of revenue, its sales and use tax, saw a more modest decline 0.2% on the month when compared to last September.
Fuel tax earnings on the month remained flat, officials said, with year-to-date collections down $2.9 million, or 1.2%. Those figures didn’t include a statewide fuel tax increase that took effect in October.
The Treasury also reported a year-over-year positive growth in New Jersey’s Business Alternative Income Tax, marking an increase of 6.6%, or $47.2 million.
“Much of September’s revenue growth is attributable to payments by those entities that filed their final extension returns,” they said. “Fiscal year-to-date revenues of $755.8 million are down by $1.7 million, or nearly flat with the same period last year.”
In August, the state reported a revenue decline of $207.4 million, or 7.4%, when compared to one year earlier, attributing drop to a large decline in CBT earnings and a fourth straight month of negative Sales and Use Tax growth.
At the start of the new fiscal year in July, which includes earnings from both 2023 and 2024, the state saw its total tax revenues up $47.3 million, or 1.7% year-over-year.
Year-to-date earnings, however, marked a decrease of 3.1%, or $1.498 billion and the state closed out fiscal ’23 $1.5 billion down, according to revenue reports.
The Treasury said the declines were in line with expectations and local lawmakers have also said they long expected revenue declines.
The issue of wide revenue dips became a concern earlier this year, however, as state lawmakers debated a major tax relief package proposed as part of Gov. Phil Murphy’s $54.3 billion fiscal 2024 budget.
While the package, which included reductions in taxes on corporate earnings and provisions for property, renters, and seniors tax relief among others and is exited to shave billions from New Jersey’s revenues into the future, was protested by some local lawmakers who cited wide expectations for revenue declines, it eventually passed the state legislature, with supporters pointing to beefed-up reserves and forecasts for revenue recovery later in the fiscal year.
The treasury department said in the report it anticipates fiscal 2024’s monthly revenue figures to continue to decline across the first half of the fiscal year, followed by growth in the second half.