NEW YORK, NY March 18, 2008 —

New Jersey's Acting Treasurer David Rousseau told state lawmakers the latest developments on Wall Street and a slowing national economy is showing up in disappointing tax revenues. WNYC's Bob Hennelly has more.

Trenton's toughest budget cycle is about to become even tougher.

Acting Treasurer Rousseau says the softening in state income tax revenues is not just showing up in the category that includes New Jersey high end earners. He says most disturbing is a decline now showing up in base withholding from average wage earners.

Currently the state income tax brings in $14 billion annually so even a decline of just 2 percent creates more than a $200 million headache for budget makers.

Even before the latest economic news Gov. Jon Corzine was calling for reducing the state workforce by 3,000. The state has until July 1 to adopt a budget.