TRENTON - Gov. Corzine's $33 billion, no-tax-increase budget proposal received a boost yesterday when legislative officials reported that state revenue had exceeded expectations.

Democratic legislative leaders said the news indicated the fiscal 2008 budget could likely be balanced without a repeat of last year's showdown, which temporarily shut down government and casinos. Corzine's legislative election-year budget contains 20 percent tax rebates for most households and hikes in aid to schools.

Senate President Richard J. Codey predicted that the only shutdown this time would be an early closure of budget talks - before the June 30 constitutional deadline.

"I think it's safe to say that all of the governor's prayers are being answered these days," he said.

Codey (D., Essex) said the unresolved issues were relatively minor. Among them are how to distribute care for the uninsured among hospitals and whether to charge Medicaid recipients for prescription drugs and outpatient hospital care.

Assembly Speaker Joseph Roberts (D., Camden) said yesterday's report "significantly narrows the remaining unresolved issues" and said lawmakers hoped to complete the budget by mid-June.

In March, legislative officials predicted revenue would fall $625 million short of Corzine administration projections, prompting fears of cutbacks or tax hikes.

But at an Assembly Budget Committee hearing yesterday, David Rosen, the Office of Legislative Services' budget officer, said stronger-than-expected revenue from the corporate business tax and income-tax withholding helped push the gap down. He projected that an additional $88 million in revenue would be needed to balance the budget; State Treasurer Bradley Abelow said $58 million would be needed.

Budget Committee Chairman Louis Greenwald said it was "a negligible hole in the grand scheme of things. . . . It's certainly something we can grapple with."

Greenwald (D., Camden) said he was optimistic state officials could pass a budget with the promised tax breaks.

Officials from the Office of Legislative Services and the Treasury Department said yesterday that they were not clear on why revenue from the corporate and income taxes was so high. Calling it "a happy surprise," Rosen said it could be due to stock options, late bonus payments, and tax enforcement efforts.

Revenue from the sales tax, meanwhile, came in lower than projected. Officials blamed, in part, a national trend after a slowdown in housing prices.

Last year's government shutdown was caused by a split over Corzine's proposal to raise the sales tax from 6 to 7 percent, which was ultimately approved. The additional money from the increase helped pay for this year's promised property-tax rebates.

Roberts, who originally opposed the tax increase, has introduced a bill that would constitutionally dedicate the proceeds of the increase toward property-tax relief. A hearing on the bill is scheduled for tomorrow; the measure's fate is unclear.

"I'm hopeful it will advance," Roberts said. "It's my responsibility to continue making a case that this is the way to go."

During yesterday's hearing, Abelow said he generally did not support constitutionally dedicating revenue toward any purpose in case of an unexpected need.

But Abelow did not take a position on Roberts' bill, saying Corzine's spending plan already called for millions of dollars more for property-tax relief than the sales-tax increase had raised.

Contact staff writer Elisa Ung

at 609-989-9016 or eung@phillynews.com.