N.J. Governor forecasts USD 13 M in sports betting revenues

Although New Jersey will not have a surprise influx of tax revenue to ease any difficult spending decisions as the Legislature heads toward a June 30 deadline, Gov. Phil Murphy is penciling in $13 million in expected revenues from sports betting, The Tribune reports 

Treasurer Elizabeth Muoio briefed the Democrat-led Assembly budget committee on Monday on the state's latest revenue collections and unveiled for the first time that the administration is estimating $13 million in new revenues from sports betting.

Muoio said the figure assumes a tax rate of between 8 and 15 percent, which is in line with what legislative proposals have put forward. Legislation is still pending after last week's Supreme Court decision striking down a federal prohibition on sports betting.

Her testimony, which is expected to be repeated on Tuesday before the Senate budget committee, comes as Murphy pushes his $37.4 billion budget. The plan calls for more than $1.5 billion in higher taxes. Among them are higher rates on incomes over $1 million as well as boosting the sales tax from 6.625 percent to 7 percent.

The testimony also comes a week after the Supreme Court struck down a 1992 federal law that barred most states from permitting sports betting.

New Jersey officials considered that Nevada, which had sports betting under the 1992 law, brought in about $16.8 million to state coffers in 2017, according to Deputy Treasurer Catherine Brennan.

Muoio faced no questioning on sports betting revenue but did confront pushback from Republicans who questioned why there were not more spending cuts in Murphy's budget. Democrats also notably questioned her over the state's affordability. Their skepticism comes as some top Democrats have said they think of tax hikes as a last resort.

Assembly Majority Leader Lou Greenwald challenged the administration to focus on making the state more affordable by addressing falling property values and sky-high property taxes.

"I think what we're doing is bringing new revenue in for a short period of time that will slowly erode away into a poorly funded tax system. That will mean the very worthy programs that the governor is fighting for ... are not going to be sustainable," he said.

Later, when Republican Assemblywoman Nancy Munoz questioned what the administration would do without tax increases, Muoio highlighted the legal requirement to enact a balanced budget.

"If it's determined that the Legislature does not want to approve some of the funding revenues that will help balance the budget, the Legislature will have to find ways to balance the budget," she said.

Muoio also told lawmakers there was no surprise revenue increase in recent tax collections. Lawmakers and officials closely watch the April revenue collections when income tax filings hit state coffers. If they're higher than expected, that can ease budget pressures.

No such luck this year.