Dip in income tax revenue could pressure New Jersey lawmakers to raise taxes

A disappointing month for New Jersey income tax revenue appears to throw cold water on the idea that a growing economy could reduce or even eliminate the need for Gov. Phil Murphy's proposed tax increases.

In April, a crucial month for tax collections because of the deadline for personal income taxes, the state reported $2.3 billion in revenue from income tax receipts, down $23.1 million, or 1 percent, from collections in April 2017, according to a press release from the Treasury Department.

Overall, tax revenue in April was up 0.3 percent from the same month last year. April is the largest month for tax collections in New Jersey.

The stagnant tax numbers suggest that growth alone won't pay for Murphy's ambitious agenda of free community college and increased payments toward pension obligations and lower-funded school districts. Murphy has proposed raising income taxes on millionaires and ending a 0.375-cent reduction in the sales tax instituted by former Gov. Chris Christie.

The Democratic chairman of the Senate budget committee, Paul Sarlo of Wood-Ridge, had expressed hope that strong tax collections would reduce the need to raise rates.

The Treasury Department news release noted that April tax collections were undermined by some taxpayers' prepaying their obligations in December to get around a new federal law limiting deductions for state and local tax payments.

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