With people buying and earning less, David Rosen, the legislative budget and finance officer, said sales and personal income tax collections will take the biggest hits.
"It should be clear that most of the risk in this forecast is on the downside, and it is easy to imagine plausible economic scenarios in which the outcome is considerably more dire than the numbers we have provided," Rosen told Assembly lawmakers Tuesday morning.
Corzine's $33 billion budget already calls for cutting spending by $2.7 billion to try to right finances plagued by mounting debt and citizen concerns about rising taxes.
Rosen said the $289 million shortfall would require either additional cuts or increased taxes, though Corzine has said he doesn't support tax increases during tough fiscal times.
The state Constitution requires a balanced budget be adopted by July 1.
The news likely won't surprise the Democratic governor.
He has said he fears national economic woes could lead to drop in tax collections that will force him to seek additional cuts.
The Democratic governor's budget plan already calls for reduced state funding for municipalities, hospitals, nursing homes, state colleges and universities and property tax rebates. New fees would be imposed for health care services for the poor and elderly. State workers would be laid off and the state agriculture, commerce and personnel departments would be eliminated.
The Assembly Budget Committee is also set to meet Tuesday with acting state Treasurer David Rousseau.
