Is NJ Facing Worst Budget Deficit Ever? [AUDIO]

Super-storm Sandy has devastated the Garden State's economy and the recently approved federal relief package will not cover the total cost of rebuilding and recovering.

New Jersey's revenue collections were lagging behind projections long before Sandy battered the state leading some to wonder aloud if we are facing our toughest budget ever.

"Not sure about that," says Governor Chris Christie. "When I first got here, being confronted with a $2.2 billion problem that you had to fix in five months and then an $11 billion problem right behind that was pretty tough. I don't think we're going to look at anywhere near those kinds of numbers."

Christie says he'll watch revenues from month-to-month because the trade off is going to be a decline in certain revenues with an increase in others.

The Governor says, "The real question is going to be on the sales and corporate business tax. Is the rebuilding effort and the sales tax and corporate profits that that's going to generate going to outpace the decline we've seen because of the businesses being closed (after Sandy) and people being a little bit more conservative in the way they spend money."

Is there any way to avoid painful cuts in the current year's budget or the one Christie will introduce next month?

He says, "It depends on how revenues turn out, but I think you're going to see some reduction in spending. I think that's likely."

Democratic leaders claim there is a huge revenue shortfall in the current Fiscal Year's spending plan and they strongly believe things are only going to get worse. Democrats say the time to identify cuts is now. Christie is confident the economy will rebound, but says he is still keeping a very close watch on revenues.

Democratic Senate Budget Committee chairman, Paul Sarlo says, "Before the hurricane came across our shores we were at a $700 million deficit. Revenues across the board were growing at less than 1%."

Senate President Steve Sweeney, also a Democrat says, "Guess what? The (budget) hole is not going to get smaller. It's only going to get larger so we really need to identify and address areas where we can figure out cuts now."