|FOR IMMEDIATE RELEASE||
CONTACTS: Kathy Hennessy
|February 10, 2005||
January Revenue Collections Fall Short of Target;
Year to Date Collections off by $204 million
- State Treasurer John E. McCormac announced today that January’s
revenue collections were $56.9 million, or 2.2 percent, below projections
for the month.
With January’s shortfall, year to date collections are now $204 million short of year to date targets for FY 2005.
“January’s disappointing performance presents challenges for New Jersey in the current fiscal year, as well as in the planning process for FY 2006,” said Treasurer McCormac.
During the key holiday period, the Sales Tax finished $1.6 million over projections in December, but $40 million under targets for January. The Income Tax exceeded targets in December by $60 million, but fell $9.9 million short of estimates for January.
Treasurer McCormac noted that the Income Tax collections for the two months reflect the influence of filers who remit the fourth, final and typically largest estimated payment for the tax year. The Sales Tax collections reflect a summary of retail activity for the holiday period. While noting that the Sales Tax was nearly 9 percent under the January target, McCormac said the shortfall might be attributed in part to gift card and gift certificate purchases, which, according to the National Retail Federation, accounted for more than ten percent of all holiday sales nationally, up from eight percent last year .
“We believe that New Jersey’s Sales Tax will see a benefit when these gift cards are redeemed, perhaps as early as this month,” said McCormac.
Of the other major taxes, Gross Income Tax collection for the month totaled $1.27 billion, which is $9.9 million below projections. The Corporate Business Tax was also down with monthly collections of $97.4 million, 4.5 percent under estimates.
Revenues were down slightly overall during the first seven months of FY2005, with total revenue collections of $14.8 billion, which is down $204 million from projections.
“As we put together the FY2006 budget, the outlook is not as
good as we hoped because we did not meet estimates on the collection
of some of the major taxes,” McCormac said. “We will monitor
revenues closely as we move toward the critical spring collection period.”