New Jersey's July revenue soars $250M over last year
New Jersey kicked off the new fiscal year on a strong note as July’s major tax collections rose 12% compared to July 2018.
The Department of Treasury reported Wednesday that collections from major revenue sources totaled $2.33 billion, a $250.1 million increase from the year-earlier period.
The Garden State saw the biggest monthly increase with corporate business taxes, which jumped 32.6% from last July to $177.8 million. New Jersey is now more than halfway through the second year of a temporary 2.5% CBT surtax on incomes above $1 million. The temporary surtax will decrease to 1.5% starting January for a two-year period before phasing out.
The Gross Income Tax, which is dedicated to the state’s Property Tax Relief Fund, rose 15.5% from July 2018 for a total of $948.9 million, a $127.5 million jump. The sales and use tax, which is New Jersey’s general fund revenue source totaled $1.02 billion for the month, a 5.1% year-over-year rise.
Total revenues for 13 months ending in July jumped $3.175 billion, or 9.9%, which the Treasury Department attributed to “numerous tax policy changes” enacted last year. The yearly spike included a big April when gross income tax payments soared 57% from a year earlier aided by changing taxpayer behavior from federal tax changes that capped deductions on state and local taxes at $10,000, which prompted less earlier filers.
July began the 2020 fiscal year after Gov. Phil Murphy signed a $38.7 billion budget in late June. However, the New Jersey Treasury Department effectively treats July as the 13th month of the fiscal year since it includes revenues from both 2019 and 2020. Final collection figures for 2019 will be published in New Jersey’s upcoming Comprehensive Annual Financial Report following an annual accounting process.
A growing pension burden coupled with structurally imbalanced budgets triggered 11 rating downgrades for New Jersey general obligation bonds between 2011 and 2017 making Illinois the only U.S. state with lower-rated debt. New Jersey GOs are now rated A-minus by S&P Global Ratings, A3 by Moody's Investors Service and A by Fitch and Kroll Bond Rating Agency.