New Jersey's tax revenue collections for the first three months of the fiscal year are faring well and exceeding expectations, state treasury officials reported Friday.
In the current budget, the state forecast a 3.4 percent growth rate over the previous fiscal year. Actual tax collection increases for July, August and September, the first quarter of the fiscal year that began July 1, are running at 4.7 percent.
The monthly report indicates strong 8.1 percent growth in gross income tax revenue, but warns that gains in September were partially driven by an extra pay period.
Acting Treasurer Robert A. Romano signaled that while positive, it's too soon to celebrate.
"Year-to-date totals are encouraging, especially in the important month of September, and recent collections have exceeded initial estimates from the department," he said. "However, we remain mindful that it is still very early in the fiscal year and we must carefully monitor the volatility of some of the state's major revenue sources."
Sales tax revenues are projected to grow by 2.9 percent, but are currently outperforming expectations at 3.6 percent. The state's duo of death taxes showed robust 37.2 percent improvement over this time last year, compared to a projected 2.1 percent loss for the year.
The report revealed some struggles for the first three months in corporation business taxes and casino revenue. Business tax revenue is down 15.4 percent, but the state expects to beat last year's numbers by 3.4 percent.
Petroleum Products Gross Receipts, Alcohol Beverage Excise, Realty Transfer and Tobacco Projects Wholesale Sales collections were sluggish as well.
Revenue estimates were used to build the current budget, and the state could face end-of-the-year budget cuts if tax collections fall short. But economists and lawmakers praised Gov. Chris Christie's administration for this year's estimates, which they called conservative and reasonable.
New Jersey's three largest taxes — personal income, corporate and sales — are considered challenging to predict. The treasurer's office noted as much in the monthly report, saying "revenues from this (Gross Income Tax) remain volatile in light of its dependence on capital gains, bonuses and other forms of extraordinary income."
The corporation and personal income tax revenues fluctuate, but the state generally benefits from more stable sales tax collections.