New Jersey Revenue

New Jersey's state revenue forecasters are projecting that overall tax collections will be slightly higher than original estimates for the current fiscal year, which ends June 30. The updated projections, released by the state Department of Treasury, add more than $180 million to the expected minimum, giving Governor Mikie Sherrill and lawmakers room to breathe before the new fiscal year, which begins July 1. The state budget surplus is now projected to exceed $7.2 billion by the end of June, providing a larger financial cushion with the current uncertainty surrounding President Trump's conflict in the Middle East and the potential economic consequences from widespread import tariffs.

The most significant contributor to this improvement is the state's income tax, which is now expected to generate over $22 billion through June, over $1 billion more than initially forecast. Treasury officials suggest this growth is due to strong performance in estimated payments and capital markets. The pass-through business alternative income tax also saw its forecast grow by more than 5%, reaching $4.8 billion.

The sales tax projection, on the other hand, remained unchanged at over $14 billion, as New Jersey consumers continue to spend despite tariff concerns, though rising inflation is shifting more consumer spending toward nontaxable necessities like groceries.

A notable concern, however, is the corporation business tax, which has been cut $884 million down to $3.3 billion due to significant tax-credit claims and changes to the federal tax guidelines under last year's reconciliation law. The corporate transit fee, a tax on top-earning corporations that funds NJ Transit, also fell by roughly $185 million due to breakdowns caused by harsh winter conditions. 

The Sherrill administration plans to release another revenue update in May as global events with economic implications develop.