The towns, commuter suburbs of Philadelphia and New York City, had eliminated jobs and reduced garbage collection and other expenses. Analysts cited high debt and, in Long Hill's case, few prospects for revenue growth.

Almost 60 percent of U.S. municipal officers said finances were worse in 2011 than in 2010, according to a September survey by the National League of Cities. Two in five reported that their city cut services other than public safety and social programs, including funding for libraries, parks and recreation.

The strains prompted New Jersey voters in November to approve a merger of Princeton township and borough, after at least three earlier referendums failed. Local officials estimate the combination will save as much as $3.1 million a year.

"It's about making choices: We can't any longer think we can sit around and have everything we want and pay for it," Christie said in a November public meeting with the Princeton mayors after the election. "We can't try and govern in a way that makes everyone happy."

New Jersey is the second-richest state in the U.S. after Maryland, with median household income of $70,378 in 2008. It has the nation's highest property taxes, averaging $7,576 last year, according to the state Department of Community Affairs. The levies, the main source of funding for schools and towns, have climbed 70 percent in the past decade.

Tax Bills

In 2010, Millburn's average $19,441 property-tax bill was the third-highest in the state, while Montclair's $16,413 was 12th-highest. In Princeton, the average was $15,255 in the borough and $16,212 in the township.

In Upper Saddle River, ranked by Bloomberg Businessweek as the 21st-richest U.S. zip code, fifth graders are learning on iPads bought by the school district and donors. Administrators don't know whether they can afford to buy the devices for all of their students, said Angela Sacco-Torres, 50, president of the school board and co-owner of JMT Mortgage Consulting.

The town of 8,200 in northern Bergen County has been hit by job losses in financial services, Sacco-Torres said. While total employment in New Jersey fell 3.5 percent from 2004 to 2009, the state's financial-services industry lost 6.1 percent of its jobs in that period, according to the New Jersey labor department.

"Upper Saddle River was a new-money community," Sacco- Torres said in a Dec. 15 telephone interview. "We had a lot of people who worked on the Street and then the economy went southward. A lot of people in town are struggling. A lot of people are losing their homes."

Upper Saddle River residents in November voted not to renew a tax for parks and recreation.