N.J. Tax Windfall to Replenish Savings Account Empty Since 2008
(Bloomberg) -- New Jersey will replenish an emergency savings account that has sat empty since late 2008, evidence that tax collections are benefiting from the decade-long economic expansion even with President Donald Trump’s state and local tax-deduction changes.
State Treasurer Elizabeth Muoio said at least $250 million for the current fiscal year will be placed into the Surplus Revenue Fund, which can be used only in emergencies. That’s after anticipated annual budget surpluses of $1 billion-plus -- the most in a decade -- for the current and next fiscal years, which Governor Phil Murphy announced in March.
“The unprecedented nature of tax law changes at both the state and federal level over the last two years were the primary factors contributing to the higher-than-anticipated revenues the state is witnessing this fiscal year,” the Treasurer’s Office said in a statement.
New Jersey is among states whose finances are being bolstered by the stock market’s gains and long-running economic expansion. The anticipated surplus signals that states’ tax collections aren’t suffering negative repercussions from the $10,000 limit on state and local tax deductions, which initially made it difficult for states to forecast and caused revenue to lag behind estimates during some months.
The Surplus Revenue Fund last had a balance of $734.7 million, the treasurer’s office said in a statement. It was drained in one year, as the state was gripped by the recession. The exact deposit amount will be made public at a Trenton hearing on May 14.
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