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By Lisa Fleisher/Statehouse Bureau

November 26, 2009, 12:42PM

Newark -- Gov. Jon Corzine said his administration is still searching for places to cut spending to meet a larger-than-expected budget gap that was revealed yesterday.

Speaking to Star-Ledger reporters outside the Goodwill Rescue Mission today, he said "we have to do what we have to do."

"We'll hold back spending. And then the new governor can figure out whether he wants to unfreeze that or freeze it," said the outgoing governor, who lost his bid for re - election to Gov.-elect Chris Christie earlier this month.

Corzine plans to cut up to $400 million from schools, higher education, hospitals, pension payments and municipalities to help close a $1 billion budget gap, according to a bond disclosure filed yesterday.

Today, Corzine said state government may pay a percentage of its aid to municipalities next month. He said they've found up to $190 million in cuts, but that they're still trying to decide where to lower costs.

Corzine spokesman Patrick McKenna said the governor learned about the additional budget gap when he returned from a post-campaign vacation around Nov. 10.

The state has to find places where it has pledged — but not yet delivered — money. For example, the state makes its pension plan contribution on June 30. Historically, that’s been a favorite place to dip into to fix budget problems. This year’s payment of $100 million — already a fraction of the $2.5 billion payment recommended by actuaries — could be a target for cuts, state pension director Fred Beaver said.

This is the latest in a series of budget adjustments this year as the state deals with an unexpectedly deep recession and the second year in a row the state has had to make billion-dollar-plus mid-year spending cuts.

In October, the state said it had received $190 million less in taxes than expected, and two days after losing a bid for re-election, Corzine ordered his departments to tell him by Dec. 1 where they could cut $400 million from their spending plans.

Yesterday, the state revealed it had collected $222 million less in taxes during October than expected, including a 49 percent drop in expected corporation business tax, a 13.2 percent drop in expected sales tax and 9 percent drop in gross income tax.

The state also told Wall Street bond investors in yesterday's disclosure it started the year with $244 million less than expected, and was facing $350 million in additional funding needs.

by Lisa Fleisher and Chris Megerian of the Statehouse Bureau.