New Jersey raises $6.9 billion in tax revenue more than expected: ‘Unprecedented’
from New Jersey youAx revenue is $6.9 billion higher than Governor Phil Murphy predicted just months ago, the New Jersey Office of Legislative Services announced Monday.
David Drescher, chief of OLS’ revenue, finance and appropriations section, told lawmakers the state saw an “unprecedented increase in April” in revenue from already historically high levels.
“As a result, we have increased our [gross income tax] projected $3.6 billion over two years. This will leave the state considerably better positioned than we originally envisioned, some $6.9 billion or 7.7% higher than the executive’s forecast of just a few months ago,” said Drescher, according to NJBIZ.
He attributed the windfall to financial markets and the state’s buoyant economy, although Drescher predicted the uptrend would not last as the Federal Reserve continues to raise interest rates in an effort to calm inflation.
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Democrat Craig Coughlin, speaker of the New Jersey General Assembly, said his state needed tax relief and would push for the largest tax relief package in New Jersey history in under this year’s budget.
“The revenue update shared with the Legislative Assembly today demonstrates a surplus of billions of dollars beyond what was projected in the Governor’s proposed budget,” Coughlin said. “This good news is made possible because we have made tough choices over the past five years to put New Jersey back on the path to fiscal health, and we will continue to make responsible decisions in this year’s budget.”
Murphy, a Democrat, has offered to give $900 million in property tax relief, but Republicans in the state Legislature are pushing to return a figure of more than $4 billion to Garden taxpayers State.
“As New Jersey families grapple with soaring prices and inflation, we believe Governor Murphy must commit to immediately returning these surpluses to families hurting today,” the chief executive said. New Jersey Senate minority, Steven Oroho, a Republican.
At the height of the pandemic, New Jersey’s economy and the economy of the United States rapidly contracted as restaurants and businesses were forced to close.
President Joe Biden passed a massive spending bill last year that includes stimulus checks after former President Donald Trump had already breathed two more stimulus payments into the economy ahead of Democratic legislation.
As people emerged from the pandemic full of money and eager to venture out of their homes, they started spending their money, which sent the country’s gross domestic product growth skyrocketing.
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An unwelcome outcome of the booming economy was that inflation soared, with consumer prices rising 8.3% in the 12 months to April, near the fastest pace in four decades.
Today, the Fed hopes to rein in inflation by slowing spending by raising its interest rate targets and reversing its unprecedentedly loose monetary policy.