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Mayor Michael Bloomberg is now ordering city agency heads to prepare for a worst-case budget scenario of cuts of up to $1.3 billion dollars in state funding to the city. He said the results would be catastrophic, and that almost 19,000 employees would have to go, including more than 8,500 teachers.

This would be in addition to $5 billion in cuts the mayor called for in his executive budget back in January. Back then, Bloomberg asked for the city's workforce shrink by more than 4,000 employees, with nearly 1,000 of those job losses coming through layoffs.

"This is a very serious situation and we are highly concerned about it and its impact on the city," said Deputy Mayor Edward Skyler.

A memo released Tuesday by the mayor's budget director, Mark Page, asks for city officials to come up with ways for their agencies to save money.

The cuts would mean a 3.6-percent reduction in funding for the New York City Police, Fire, Corrections and Sanitation Departments, a 2.7-percent cut for the Department of Education and a 7.2-percent cut for other agencies.

"We're down 6,000 police officers from where we were. We are scheduled to go down another 2,000 police officers," said Police Commissioner Ray Kelly. "We are going to have to go back and look at our headcount.

"In the last couple of years, unfortunately, our schools have had to absorb some cuts, but what's great about it -- and you see it here -- is while I'm sure they don't like any cuts, they are pushing the envelope forward," said Schools Chancellor Joel Klein.

Page writes in the memo that he is hopeful that in the end the city won't face such severe cuts from the state, but he is nevertheless preparing for that scenario.

The budget director asks agencies to respond with proposals by April 7 that make their funding priorities clear.

The new city budget is for the fiscal year that begins on July 1.