(Reuters) - New Jersey's tax revenue eased 2.5 percent in December from a year-ago, but Governor Chris Christie on Wednesday said the state could still afford the 10 percent income tax cut for all tax brackets that he proposed one day earlier.

Many states -- and the federal government -- have seen income tax collections slip in December, noted New Jersey's chief economist at the Department of Treasury, Charles Steindel, in a statement.

The decline is partly due to disappointing income tax collections, he said.

Economists have said that high-income earners likely took capital gains in 2010 instead of 2011 because they were uncertain that Bush era tax cuts would be extended.

New Jersey's gross income tax collections fell by 7.8 percent in December 2011 from a year-ago, the state Department of Treasury said in a statement.

The Department of Treasury's chief economist cautioned: "Key indicators do not now suggest that a dramatic change in outlook is warranted for the rest of the fiscal year."

Asked whether the state could still afford the 10 percent income tax cut he proposed on Tuesday, Christie on the radio show WKXW-FM said: "I'm telling them (legislators) that we can afford the tax cut."

New Jersey's legislature is led by Democrats, whose leaders have said they opposed Christie's income tax cut because it would give the most relief to high-income earners. Saying lawmakers would "rue the day" if they blocked his income tax relief, Christie noted that the tax cut he proposed would be spread over three years.

The longer-term results were brighter for New Jersey, whose fiscal years end on June 30. Revenue rose by 3.12 percent when the results for the fiscal year-to-date period ending in December 2011 were compared to a year-ago.

(Reporting By Joan Gralla; Editing by Diane Craft)