Short

The state's economic downturn eventually will be mirrored in state tax receipts. And today the legislature will be told not to count on all the tax collections forecast in the governor's budget message.

The Assembly Buget Committee will hear that tax collections will be $134 million below the Corzine Administration's estimates over the next 15 months. The Office of Legislative Services (OLS), which is the legislature's non-partisan research and legal arm, will be the bearer of bad news.

Bad news that could get worse, that is,

Joseph Seneca, an economics professor at Rutgers University, agrees the state's revenue outlook is more likely to get darker than rosier in coming weeks.

"I think it's an alignment of a number of very potent negatives all pointing to an outlook that can be summarized as one of extreme caution," he said.

Seneca noted that the last time the state suffered a recession in 2001, state income tax collections actually fell two years in a row. That's largely because Wall Street, a major employer of New Jersey residents, was hit hard by the downturn.

The current situation is similar, only potentially worse, Seneca said. Investment banks already are pondering major layoffs due to $250 million in losses from subprime mortgages, he said.

"This recession has the potential to be broader and deeper than the two previous recessions that were shallow and brief," he said.

Time to dust off that list of billions of dollars of potential spending cuts and give it a second look, eh?