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New Jersey's Treasury Reveals Mixed Financial Picture in November Revenue Report
November sees a rise in revenue from key taxes, yet overall collections for the fiscal year still trail behind previous year's figures.
The New Jersey Department of the Treasury disclosed a complex financial landscape in its November revenue report. Key taxes like the Gross Income Tax and Corporation Business Tax saw an increase, yet overall revenue collections for the fiscal year remain lower than last year.
TRENTON, NJ - The Department of the Treasury's recent report painted a nuanced picture of the state's fiscal health. For November, the Treasury reported a total of $2.647 billion in major tax revenues, marking a 2.6 percent increase over the previous year, primarily driven by higher collections from the Gross Income Tax, Corporation Business Tax, and the Pass-Through Business Alternative Income Tax. Despite these gains, the fiscal year-to-date collections stood at $13.564 billion, reflecting a 2.8 percent decrease compared to the same period last fiscal year.
The Gross Income Tax, earmarked for the Property Tax Relief Fund, showed a modest rise in November, reaching $1.209 billion, a 1.2 percent year-over-year increase. This growth was attributed to increased employer withholdings but was tempered by declines in estimated and final payments, coupled with higher refunds. However, the fiscal year-to-date figure for this tax reveals a 7.1 percent decline from the previous year.
In contrast, the Sales and Use Tax (SUT), a major contributor to the General Fund, experienced a slight downturn in November, totaling $973.0 million, 1.2 percent lower than last year. This decline aligns with a trend of SUT collections growing slower than regional consumer price inflation for seven consecutive months.
The Corporation Business Tax, another significant revenue source, reported a notable increase in November, up by 47.9 percent from the previous year, mainly due to higher final payments. However, an increase in refunds partially offset these gains.
The Petroleum Products Gross Receipts Tax (PPGRT) also saw a marginal increase in November. However, year-to-date collections slightly dipped compared to last year. The report highlighted the recent hike in the PPGRT rate, expected to generate additional revenue in the coming months.
In contrast, Realty Transfer Fee revenues experienced a notable decrease, primarily due to reduced unit sales in the real estate market. The Treasury notes the ongoing fluctuation in home prices and mortgage rates as influencing factors.
The Treasury remains cautious in its outlook, expecting an overall decline in major tax revenue collections for the first half of the fiscal year 2024, with prospects of growth in the latter half.
This mixed financial report from the New Jersey Treasury underlines the challenges and complexities of the state's fiscal health amid shifting economic indicators. As these trends continue to unfold, they will undoubtedly play a critical role in shaping New Jersey's economic policies and priorities in the coming months.
