TRENTON -- Gov. Chris Christie Tuesday will propose slashing aid to public schools by $820 million as part of a state budget that will also make major cuts in aid to towns and colleges, officials familiar with the plan said today.

The word of a pending big loss in aid spurred school district officials today to say they’re making plans for layoffs and program cuts.

"Every district is preparing for the worst," said John Rodecker, superintendent of the nearly 10,000-student Perth Amboy School District. "We are anticipating layoffs. To what extent depends on what the bottom line is this week."

The Republican governor will propose making across-the-board cuts of up to 5 percent of each district’s budget — a move administration officials believe will spur a new court battle over how New Jersey funds its public schools, said four state officials who spoke on the condition of anonymity ahead of Christie’s speech.

Christie’s $29.3 billion budget will also call for suspending property tax rebate checks until they are converted into credits by next spring. The proposal includes a constitutional amendment limiting annual property tax increases to 2.5 percent, while skipping a $3 billion payment to the struggling state pension system.

Christie ruled out raising taxes to solve the $11 billion deficit, despite some Democrats’ calls to restore a one-time income tax surcharge on the state’s wealthiest residents.

The overall reduction of about $820 million in school aid could be at odds with New Jersey’s school funding formula, which distributes state aid based on enrollment, with extra money going to districts with high concentrations of students who are poor, have special needs or limited English skills. That formula, which survived a Supreme Court challenge last spring, replaced the longstanding "Abbott" system that sent the bulk of the aid to 31 poor urban districts.

The cuts to schools come on top of $475 million that Christie sliced from school aid in the current fiscal year. Those cuts were based on districts’ excess surplus.

In Perth Amboy, a 5 percent total budget reduction would mean about $9.5 million, coming on the heels of a $15 million loss in excess surplus funds. Elizabeth Mayor J. Christian Bollwage said the cuts would mean 40 to 50 students per classroom, possible closings of schools and the elimination of classroom aides in many urban districts.

"This budget clearly becomes a class budget," said Bollwage, a Democrat. "Chris Christie is clearly targeting a segment of the population that is not the New Jersey that he comes from."

Christie has called for shared sacrifice and promised to give towns and school districts the "tools" to cope with state-aid cuts, including changes to collective bargaining for police, fire and teacher contracts, to the pensions and benefits for current public employees, and to the civil service system.

His budget would slice municipal aid by $445 million and aid to public colleges by $175 million, the officials said. It also counts on $50 million in savings from privatizing unspecified government functions, and would raise $45 million through a hospital provider tax to generate $45 million in federal funding.

He will also propose to raise money through higher fees, such as business filing fees, though specifics were still sketchy, said two Democrats briefed on the plan.

State spending on direct services, a quarter of the budget, would also be barred from increasing by more than 2.5 percent each year. Christie and the Democrat-controlled Legislature must agree on a budget by July 1.

By Claire Heininger and Josh Margolin/Statehouse Bureau

Lisa Fleisher, Jeanette Rundquist, Kristen Alloway, Susan K. Livio and MaryAnn Spoto contributed to this report.