In his first major budget speech since being elected in November, the Republican governor told lawmakers that the state is in a financial state of crisis and that the current budget is in "shambles."
Christie plans to freeze $1.6 billion in unspent money, including $475 million in school aid, $62 million for higher education, and $12.6 million in hospital charity care.
He will also freeze nearly $16 million in unused grant money from the Division of Youth and Family Services and $158 million from the Clean Energy Fund.
Christie told a joint session of the Legislature, "higher spending is the road to ruin," and that the cuts, while difficult, were necessary to keep a balanced budget, as required under the state constitution.
"Today, we come to terms with the fact that we cannot spend money on everything we want. Today, the days of Alice in Wonderland budgeting in Trenton end," Christie said.
As a result of withholding school aid, districts will be forced to spend down surpluses, instead of using the money toward property tax relief.
Frank Belluscio, spokesman for the New Jersey School Boards Association, said any cut would affect districts eventually, but school programs probably wouldn't need to be cut immediately under Christie's proposal.
Belluscio said his group was relieved to hear Christie was talking about withholding only $475 million from schools.
"We were hearing a billion dollars," he said.
The withheld school money accounts for about 5 percent of the school aid budgeted for 2010 and will affect nearly all of the state's 600-plus districts; more than 100 districts will lose all state aid for the remainder of the year.
Democratic Gov. Jon S. Corzine had proposed cutting $300 million in school aid before he left office in January but planned to ask for legislative approval to withhold the aid; Christie believes he does not need legislative approval but can do it through an executive order, which he signed privately Thursday before speaking to lawmakers.
Democratic leaders said they were looking into whether the governor could make the school cuts by executive order or whether they need legislative approval.
Because the aid was only coming from districts with surpluses, no teachers would be laid off, textbooks would still be bought, and no new property taxes would be needed, Christie said.
He also will cut 375 programs that he deems inefficient, including freezing a job-creation program under Corzine that offered $3,000 grants to companies for every new employee they hire and keep for at least a year. That will save nearly $58 million.
To target what he has identified as waste, Christie also plans to do away with audits of cities and towns receiving special municipal aid.
Last month, he criticized the previous administration for approving $121 million in extraordinary aid to five distressed municipalities just before Corzine left office. Republicans had argued for the audits as a way to monitor the spending.
Christie said he will also cut the state subsidy to NJ Transit, which may mean reductions in service and increases in fares. "The system needs to be made more efficient and effective," he said.
Environmentalists blasted Christie for scrapping the remainder of the Clean Energy Fund, which offers matching grants to people who make energy efficient upgrades, such as installing new windows and appliances.
"It's bad for the environment and bad for the economy," said Jeff Tittel, the executive director of the New Jersey chapter of the Sierra Club, who estimated that the program creates as 20,000 clean energy jobs.
The Public Advocate's Office will also be disbanded, for a savings of $600,000.
"The theme was that he was not increasing taxes," said Bill Dressel, executive director of the New Jersey State League of Municipalities. "If that's not translated into local taxes, that's applaudable."
The speech got off to an awkward start as Democratic lawmakers introduced the governor minutes too early and had to extend their standing ovation until he arrived at the Assembly chamber.
"He must have gotten caught in a snowstorm," Democratic Assemblyman Lou Greenwald joked.
---
Associated Press writers Angela Delli Santi in Trenton and Geoff Mulvihill in Haddonfield contributed to this report.
