Sandy gives Christie second thoughts about tax cut

LINCROFT, N.J. - Sandy's effect on state revenue has left Gov. Christie unsure whether he will pursue a tax cut that was the centerpiece of his economic strategy, he said at a news conference Monday.

Revenue collection may pick up as New Jersey residents purchase supplies to rebuild, Christie said in this Monmouth County town. He said he would decide whether to push for lower taxes after seeing the latest revenue figures.

"In the short term, these past two weeks, I'm sure we've experienced the diminution of revenue," he said. "The question is, what will the revenue picture be?"

The Republican governor spent much of this year touting a Jersey comeback, a recovery plan that sought tax cuts or credits. His revenue forecasts were challenged by Democrats, who control the legislature, and by Standard & Poor's, which in September revised its outlook on the state's debt to negative from stable.

Collections for the first three months of the fiscal year that began July 1 missed Christie's forecast by 4 percent, putting revenue about $175 million short of his target.

Sandy slammed into the Jersey coast Oct. 29, smashing entire oceanfront communities and leaving more than half the state in the dark. Though he said revenue probably would be down for last month and November, Christie expects it will pick up from December through June.

Asked whether the loss of revenue would lead him to delay or scrap the tax cut, Christie said: "Don't know. I mean, I still have to work with the treasurer on that."

"Rebuilding is going to require the purchase of enormous amounts of supplies, the employment of people who would not have been otherwise, presumably, which means more taxes from them," Christie said.

"And it would mean businesses have an opportunity to, responsibly and within the law, make more money than they would otherwise."

Sandy underscored why Democrats' wait-and-see approach toward a tax cut was prudent, said Assemblyman Vincent Prieto (D., Hudson), head of his house's Budget Committee.

Lawmakers set aside $183 million in the $31.7 billion budget for the cost of the tax cuts and have refused to release it unless the state reaches Christie's revenue target.

Lost tourism will affect New Jersey's revenue through at least next year, Prieto said in an interview Monday. The state's 127-mile shoreline is the backbone of a $38 billion tourism industry, the state's third-largest revenue sector.

"We had this devastation and although we're going to get a lot of money from the federal government, there's probably going to be a price tag for us," Prieto said. "Right now is not the time to be talking about a tax cut."