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In a letter to agency heads, Bloomberg is ordering all city agencies to submit plans for trimming a total of $800 million from their 2011 budgets.

According to the memo, uniformed forces, district attorney’s offices, and the Department of Education must cut spending by 2.7 percent, while all other agencies are expected to trim 5.4 percent from their budgets.

All this comes as the city looks to close a $3.7 billion budget gap.

"Every agency wants to have more. Every agency has good ideas to do more things, which are great," said the mayor. "Every agency is worried the gains they made could slip back if they don't have the resources and that's just one of the challenges that we all face. But if you say that about every agency and nobody cuts we go bankrupt, and then we have nothing."

The mayor says a hiring freeze, with exceptions for positions affecting public health and safety, will be in effect until agencies have their plans approved.

Those plans are due by October 8.

Meanwhile, layoffs and property tax hikes are not out of the question. In fact, a top deputy said they were inevitable Tuesday.

"You can never say that nothing, that anything, is absolutely never on the table, it's not the 'Read my lips' kind of thing," Bloomberg said.

"The concern is if things slow more than they're anticipating then they might not build up that cushion, and if they don't, they're going to have to find ways to bring the city budget into balance," said Ronnie Lowenstein of the New York City Independent Budget Office.

The mayor is also blaming Albany for putting the city on the hook for pensions that are more generous than it can afford. He says when he came into office in 2002, health benefits and pension costs were $1.5 billion a year, compared to $7.5 billion today.

But that figure doesn't account for the effect the stock market collapse had on pensions -- losses the city is legally required to make up.

"Wall Street, bankers. The 'haves' versus the 'have nots' who have paid for whatever they have. And now you want to take that away from them. I think it's despicable," said Lillian Roberts of District Council 37.

Like the mayor, City Council Speaker Christine Quinn all but ruled out tax increases Tuesday, preferring job cuts instead.

"You always hope there will never be layoffs, but we're going to have to take this one step at a time in the budget process," Quinn said.

The mayor's office is already warning that city agencies will be asked to trim even more in 2012.