LEGISLATIVE FISCAL ESTIMATE

SENATE CONCURRENT RESOLUTION No. 137

STATE OF NEW JERSEY

212th LEGISLATURE

 

DATED: MAY 29, 2007

 

 

SUMMARY

 

Synopsis:

Amends the State Constitution to dedicate the amount of annual revenue derived from a tax rate of 1% imposed under the sales and use tax for property tax reform.

Type of Impact:

Neutral:  Annual Revenue Gain to Property Tax Relief Fund Offset by Annual Revenue Loss to State General Fund.

Agencies Affected:

Department of the Treasury.

 

Office of Legislative Services Estimate

Fiscal Impact

Fiscal Year 2008 

Fiscal Year 2009 

Fiscal Year 2010 

 

State General Fund

-$650,000,000

-$670,000,000

-$690,000,000

 

Property Tax Relief Fund

$650,000,000

$670,000,000

$690,000,000

 

NET DIRECT IMPACT

$0

$0

$0

 

 

 

 

·        The Office of Legislative Services (OLS) notes that the resolution would double the amount of sales tax collections dedicated to property tax reform from receipts derived from a 0.5 percent sales tax rate to receipts derived from a one percent sales tax rate.  The agency thus projects a total dedication of $1.3 billion in FY 2008, $1.34 billion in FY 2009, and $1.38 billion in FY 2010.

·        The OLS notes that the resolution would reduce currently anticipated State General Fund resources by $650 million in FY 2008, $670 million in FY 2009, and $690 million in FY 2010.

BILL DESCRIPTION

 

      Senate Concurrent Resolution No. 137 of 2007 would constitutionally shift a portion of annual State General Fund revenues to the Property Tax Relief Fund (PTRF) to finance property tax reform.  Specifically, the resolution would increase the amount of sales tax collections dedicated to the PTRF from receipts derived from a 0.5 percent tax rate to receipts derived from a one percent tax rate.

FISCAL ANALYSIS

 

EXECUTIVE BRANCH

 

      None received.

 

 

OFFICE OF LEGISLATIVE SERVICES

 

      The OLS projects that this resolution would transfer $650 million in FY 2008 State General Fund revenues to the Property Tax Relief Fund to finance property tax reform.  The shift would approximate $670 million in FY 2009 and $690 million in FY 2010.  Since the resolution would double the amount of sales tax collections dedicated to property tax reform, the total dedication would be $1.3 billion in FY 2008, $1.34 billion in FY 2009, and $1.38 billion in FY 2010.

      In gauging the magnitude of the resource shift between the two funds, the OLS employs the $9.13 billion sales tax collections estimate for FY 2008 as presented in the OLS Fiscal Year 2007-2008 Tax and Revenue Outlook (March 2007).  Since the sales and use tax rate in New Jersey is seven percent, a 14th of the estimated $9.13 billion ($650 million) reflects the amount the resolution would shift in FY 2008.  For FY 2009 and 2010, the agency inflates the $650 million by three percent per year.

      The OLS notes that the resolution would reduce currently anticipated State General Fund resources by $650 million in FY 2008, $670 million in FY 2009, and $690 million in FY 2010.

 

Section:

Revenue, Finance and Appropriations

Analyst:

Thomas Koenig

Associate Fiscal Analyst

Approved:

David J. Rosen

Legislative Budget and Finance Officer

 

This fiscal estimate has been prepared pursuant to P.L. 1980, c.67.