TRENTON -- Gov.-elect Chris Christie and his transition aides are compiling plans to slash New Jersey state spending and state programs by as much as 25 percent in response to the continuous flow of dim financial news from the New Jersey Treasury Department, according to an

obtained by The Star-Ledger.

Even before he takes office next month, his team is looking for programs that can be eliminated entirely and calling on state administrators to find untapped federal funds to cover whatever they possibly can.

"Absent strong action, revenues and expenditures will likely remain out of balance for the foreseeable future," according to a Dec. 18 memo from the state Office of Management and Budget to all cabinet members and agency directors.

The letter was dispatched "at the request of the governor-elect's transition team" and said the deadline for responses is Jan. 6, nearly two weeks before Christie is to be sworn in. Christie, a Republican, defeated Democratic Gov. Jon Corzine in last month's election and has been critical of Corzine's spending practices and budget forecasts.

The latest cuts, aimed at closing a budget gap Christie estimates at $9.5 billion, would come on top of cuts ordered by Corzine to close a $1 billion hole in the current $29 billion budget. The governor has yet to reveal those plans but expects to do so before Christmas. Corzine has also frozen "discretionary" state aid to municipalities and arts groups, forcing them to scramble to pay bills.

Unlike the federal government, state law requires Trenton's spending and revenue to be in balance; deficits are not allowed.

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Full Star-Ledger coverage of the N.J. Governor-elect Chris Christie transition

•Full Star-Ledger coverage of the N.J. budget

"In light of the state’s fiscal circumstances, all agencies are asked to submit reduction plans equal to 15 percent, 20 percent and 25 percent below their" budget projections for fiscal 2011, according to the memo. The cuts cannot include the recent rounds of reductions enacted by Corzine, but must, instead, be made on top of them -- and must include at least a five percent cut in spending on direct state services. "Across the board reductions are not to be submitted; instead consideration should be given to the elimination of ineffective programs or the consolidation of duplicative programs."

That reflects the "zero-based budgeting" approach Christie laid out during the campaign, to scorn from Democrats who said he lacked specifics. The memo also repeats Christie's vow not to raise taxes or fees, even if it means drastically shrinking the size and scope of government.

"The current situation requires the state to review its operations, to determine which functions should continue and which no longer are necessary," it says. "Revenue enhancements in place of reductions will not be considered at this time."

The document urges agency heads to find savings without cutting salary accounts and to "maximize federal revenue," including by shifting state employees into empty slots funded by the federal government. The only new spending that is acceptable must "be shown to result in long-term savings" and fit within the cuts framework.

For weeks, Christie has been laying the groundwork for extreme budget moves -- from resisting more funding for food pantries to warning that some of his favorite causes, like higher education, might not be spared the ax in his first year.

"We're broke," has become his recurring line.

On Monday, Christie was asked about the possibility of using millions in state revenue to keep the struggling New Jersey Sports and Exposition Authority afloat. "In the end, they've got to understand that, despite the season, I'm not in a giving mood," Christie said.



But Democrats -- who control both houses of the Legislature -- are already beginning to balk at sharp cuts at the same time that Christie is planning to let extra income taxes on the state's wealthiest people expire.



Christie will be sworn in Jan. 19 and is due to present his first budget to the Legislature on March 16.

By Josh Margolin and Claire Heininger

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