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Atlantic City

Michael Ein

New Jersey narrowed its budget gap in February by raising more tax revenue than expected for the third month in a row, with one notable exception: casino revenue taxes.

Casinos paid 23 percent less in gambling revenue taxes for February than during the same month last year, the state Department of the Treasury said Thursday. The decline is attributable to a drop-off in gambling revenue and means a more detailed report expected to be released by the Division of Gaming Enforcement on Monday likely will show yet another down month for the industry.

The $15 million in casino revenue taxes collected in February is 36 percent less than the $23.5 million Gov. Chris Christie had projected. The $133 million collected year-to-date is 28 percent off expectations.

Officials have said Hurricane Sandy and continuing pressure from neighboring markets are to blame. Christie and lawmakers said they expect casino revenue to turn around with the addition of Internet gambling, which could start in a few months.

Offsetting the gambling declines in February are increases in state income, sales and realty transfer tax collections, which Treasury officials said resulted in nearly 10 percent more revenue overall than forecast. Year-to-date, the state remains $194 million short of, or about 1 percent less than, what the governor had forecast. But that is less than the variance of $350 million reported last month.

“The ongoing strength in income and sales taxes, combined with a growth in realty transfer tax collections, could be a sign that a turnaround in the housing market is starting and reflects an ongoing improvement in the state’s economy,” Charles Steindel, the treasury’s chief economist, said in a statement.

David Rosen, head of the state Office of Legislative Services, issued a statement that said he believed that some of the income tax revenues were inflated due to delays in federal tax filings, which in turn lead to taxpayers waiting to file their state returns and delays in the issuing of state income tax refunds.

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