"Unlike the planning for fiscal 2011, every day I let go by was another day that money was going out the door," Gov. Christie said. "I had to put a tourniquet on the wound because the state was, from a fiscal perspective, bleeding to death," he explained. "But when I signed an executive order freezing $2.3 billion in spending, well, you heard screaming and yelling from the process freaks in Trenton who said, 'We weren't consulted. Who does he think he is, Julius Ceasar?' Actually," Christie joked, "I could deal with that reference. It was the Napoleon comparison that I was less thrilled about." Despite the steep spending freeze, the bottom line for the state is that the administration will likely not need to make any additional cuts to be on balance by June 30.

But the real challenge will be fiscal year 2011, as the state stares down a $10.7-billion deficit and staves off spending a projected $38.4 billion next year. "When former Gov. Jim Florio entered office 20 years ago, the total state budget was $12 billion," related Gov. Christie. "That means state spending is projected to increase by 322% over 20 years; 16% a year, every year, for the past 20 years. That is simply unsustainable, especially when you take into account the recession." State revenues, meanwhile, are projected at $27 billion and change.

After combing through all 2,112 lines in the state budget, the Christie Administration cut spending in every department of government, including a total cut of 9% in state spending.Gov. Christie's reasoning is simple: "I'm not going to raise taxes on the most overtaxed citizens in America." He added, "Over the next few months, the Legislature will continue to carp and call for higher taxes. They will say, 'Extend the surcharge on small businesses and individuals who have over $400,000 in income. You'll raise $900 million and we can use it to replace the $820 million in school aid you cut.' But this is just pushing the problem off of the cliff from this year to next. Because if you don't intend on keeping a permanent top rate of 10.75% then you're just putting off the day of reckoning. This budget forces the day of reckoning."

But what about that $820 million in slashed school aid? "If the Teachers Union would agree to a one-year salary freeze and put 1.5% of their salary toward health benefits, it would save $800 million this year, and all of the cuts across 580-plus districts would be wiped out," said Gov. Christie. "The Teachers Union has predictably said no and would rather see tax hikes." The governor argued that for teachers in the state--who make, on average, $50,000--1.5% of their salary works out to $750 a year for full-family medical, dental and vision, along with a $10 co-pay. "No one in this room could get that deal," he said. More recently, the governor asked the Teachers Union to forgo its mandatory dues, which run around $730 per person each year and generate $130 million in that same time period, but he has yet to receive a response.

However, not all school districts have balked at the cuts. The West Essex School Board agreed to both the salary freeze and the contribution to health benefits, in a vote of 133 to seven, saving the district $25 million, and thereby avoiding layoffs and program cuts. "For 20 years, the Teachers Union has bullied every governor, state legislature and municipal school board leader up and down this state through intimidation tactics and political contributions," said Gov. Christie. "But the only thing more dangerous than an incumbent governor you did not support is an incumbent governor you did not support who doesn't care about being reelected."

Still, the governor strongly rejected the notion that he is anti-public schools. "I care about public schools deeply and I love this state, but these are the fights we need to have. If we let the public sector unions win these fights, we will certainly be doomed to life as a second-tier state and economy."