"We have to confront the reality that we are facing a deep recession," Corzine said to reporters following a Black History Month event in Union Friday.
New Jersey residents get about $1.7 billion in property tax rebates annually.
Some homeowners saw their rebate checks cut or canceled last year. Those making more than $150,000 got no rebate, and those earning $100,000 to $150,000 saw their rebates decline by an average of $295.
While he said he is considering suspending the property tax rebates for some or all homeowners, Corzine on Friday would make no promises or predictions about next year's budget.
"We are reviewing everything," the governor said. "That's where we will stay until March 10."
Assembly Speaker Joseph Roberts Jr., D-Brooklawn, said cutting property tax relief should be a last resort in New Jersey, where property taxes average $6,800 per homeowner. That's the highest in the nation and twice the national average.
Senate President Richard Codey, D-West Orange, said he hopes the governor's budget will preserve rebates for senior citizens.
"If he asked me for my advice, I would keep them for seniors," Codey said. He acknowledged, however, that state officials have few areas left where they can cut significant amounts from the budget.
"You can't find another place to cut that would give you that much reduction," Codey said.
State lawmakers have to approve the budget. They also need to approve a related proposal to allow towns to defer more than $500 million in payments to the government worker pension system due in April.
Corzine proposed the deferral to ease the property tax burden on homeowners, but lawmakers have balked at the idea.
The pension deferral bill narrowly passed an Assembly committee but hasn't been scheduled for a vote by the full chamber. Codey said Friday the legislation has been put on hold in the Senate until after Corzine's budget address.
Corzine argues that towns will have to raise property taxes to unacceptably high levels if the state does not give them the option to defer their pension contributions.
The League of Municipalities supports the deferral plan, but state worker unions oppose it.
Corzine also has proposed trimming $284 million in state contributions to the pension fund this year. If the Legislature approves Corzine's proposal the state would contribute $1 billion to the fund, less than half its obligation.
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