In his annual budget address to the state legislature, New Jersey's Republican governor Chris Christie said the state is both setting an example and providing inspiration to the rest of the nation as it deals with the fiscal problems facing governments across the country.

"Democratic governors and Republican governors now look to New Jersey as a beacon of hope for what can happen when leaders lead and a people sacrifice as one for the future of our children," Christie said.

He added New Jersey is taking that lead on fiscal issues because Washington isn't.

"Some thought the change might come from the federal government. But that hasn't been the case," Christie said. "It is spending more than ever. The change is coming from the states, and the charge is being led by New Jersey."

As public sector workers rally against proposed budgets in the Midwest, Christie says New Jersey is showing other states they must do to get their financial houses in order.

"In Wisconsin and Ohio, they have decided there can no longer be two classes of citizens: one that receives rich health and pension benefits, and all the rest who are left to pay for them," Christie said. "Almost all states face a major issue in financing employee pensions. New Jersey is far from alone here. This is not a Republican or a Democratic issue. This is a responsibility issue. And we must solve it."

New Jersey has made major budget cuts without raising taxes and has closed $13 billion in budget gaps over the last two years. Now, Christie says the state must embrace what he calls "the new normal," stopping blindly-funded old programs while looking forward to see where the state's money can be best spent.

"We will no longer blindly fund commitments that prior legislators and governors have made, regardless of whether they were wise, and regardless of whether they yielded programs that even work," Christie said. "If we are willing to cut certain programs that have not worked in the past, we can put greater emphasis on those things that hold the promise of a better future."

The new budget Christie is proposing for New Jersey is $29.4 billion and its spending cuts - including asking public employees to pay more for their health care - will have to be passed by the Democrat-controlled state legislature. The budget's calculations also rely on continued economic growth to increase revenue.