The coronavirus pandemic has caused New Jersey’s state budget to take a major hit, and officials say that the damage could be worse than the Great Recession.

The Murphy administration announced Friday that it plans to use its entire rainy-day fund, institute a statewide hiring freeze and make over $1.3 billion in cuts to make up for the multibillion deficit caused by the pandemic.

Gov. Phil Murphy delivered his state budget address on Feb. 25, when just 57 cases of COVID-19 were reported nationwide.

"Today, wages are rising and more New Jerseyans are working than ever before. Our unemployment rate is below 4% for the longest period of time than at any other point in the past 20 years,” Murphy said.

But a lot has changed in just three months.

“We are now potentially, in New Jersey, facing a shortfall of nearly $10 billion through the end of fiscal 2021 next June,” New Jersey Treasurer Elizabeth Muoio said Friday.

The pandemic has decimated the national economy, along with New Jersey’s tax revenue.

“We’ve been approaching a fiscal cliff, but today we get our first glimpses over the edge, and it isn’t pretty,” Murphy said.

The state projects that by June 30 it will have collected almost $1 billion fewer dollars in income tax. Sales tax revenue will fall by more than $1 billion and corporate taxes will be down by $451 million.

“Today we’re forced to begin making some hard decisions,” Murphy said.

The administration is proposing stark budget cuts and borrowing for an extended budget year that will now end on Sept. 20. Cuts include: $132 million in additional funding for New Jersey Transit, $50 million in funding for two years of tuition at public colleges and universities and $2 million for the 9/11 Empty Sky Memorial in Jersey City.

“At the end of the day, I have no doubt we’ll position New Jersey firmly on the road to recovery,” Muoio said.

The state treasury says that they expect a sharp drop in revenues this spring and summer, but gradual improvement until June of next year. But the department cautions that these numbers do not factor in a second wave of COVID-19 that could hit in the fall.