Consulting Firms Reveal Lower Revenue Projections for New Jersey.

Byline: Eugene Kiely

Dec. 11--TRENTON, N.J.--Two economic consulting firms hired by the state estimate that New Jersey's revenue shortfall this year could top $1.4 billion -- double what the DiFrancesco administration has publicly acknowledged.

In a separate development, Moody's Investors Service late yesterday changed the state's rating outlook from stable to negative.

A budget task force assembled by Gov.-elect James E. McGreevey discovered the revised projections while reviewing budget documents during the transition. The task force included the projections in a six-page memo on the budget that was sent to legislators last week.

Economy.com, one of the consultants, warned last month in a report to the state Department of Treasury that the revenue shortfall could reach $1.8 billion, while Deloitte & Touche placed the figure at $1.4 billion, according to the memo.

Still, in a prospectus for a $2 billion Transportation Trust Fund bond issue that is to go to market this week, the state told prospective bondholders that the revenue shortfall "will exceed $700 million," without mentioning the possibility for a much larger shortfall.

Acting Gov. Donald T. DiFrancesco yesterday dismissed the consultants' projections as overstating the problem. He said November revenue figures, which have not been publicly released, will show revenues "are now creeping back up."