Democratic leaders in the legislature say New Jersey's budget was in serious trouble long before Sandy battered the Garden State. They 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 indentify cuts is now.

Senate President Steve Sweeney and State Senator Paul Sarlo tour beach damage from Sandy. (Senate Democratic Office)

Governor Chris Christie is confident the economy will rebound, but said he is still keeping a very close watch on revenues.

Democratic Senate Budget Committee chairman, Paul Sarlo said, "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 said, "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."

"We're still spending less than in the current fiscal year budget than we spent in New Jersey in the 08-09 budgets under (former Governor) Jon Corzine," said Christie. "We're still being very vigilant about spending. We're going to continue to be vigilant about spending and if we have to cut back some we will. I think we've shown we can do that and the State survives and the sun comes up the next morning and it will this time."

The outlook for next year isn't bright either said Democratic Assembly Speaker Sheila Oliver. She explained, "This legislature and this Governor will be challenged to address something that could approach a $2 billion deficit."

Sweeney said Democrats are very willing to work with Christie to address the budget problems, but he says the feeling doesn't seem to be mutual. The Senate President says, "Whenever we don't agree with him he says we're just playing politics. Now it's the hurricane ruining the budget. Well, the dog didn't steal my homework."