'On The Cutting Edge.'

Newt Gingrich proclaimed himself ""in awe'' of their budget-slashing fervor. Bob Dole called New Jersey Gov. Christine Todd Whitman ""on the cutting edge of taxes'' -- and the pun might even have been intentional. At a confab in Williamsburg, Va., last week, 30 Republican governors and governors-elect reveled in their role as vanguards of America's latest tax revolution. Whitman is their standard-bearer, having pledged in her 1993 campaign to chop the state income tax by 30 percent. ""We've been out there doing a lot of the stuff you're talking about,'' says the 48-year-old governor. Newt and Bob agree -- that's one reason Whitman is now touted as a vice presidential candidate.

Back home in New Jersey, however, the enthusiasm for Whitman is beginning to wane. Not with voters -- more than 60 percent still approve of the job Whitman is doing. But a number of mayors fear that if the governor reduces state aid to towns and school districts, they'll be forced to raise local property taxes -- an act tantamount to political suicide. ""The attitude at both the national and the state level is, "Let's cut income taxes!' '' says J. Christian Bollwage, the Democratic mayor of Elizabeth, N.J. ""There's no regard for the governments below them. We're the only ones left who have to provide services.'' He estimates that the average family in Elizabeth saved $51 in income taxes last year, but paid almost $300 more in property taxes.

Whitman insists that municipalities can trim plenty of fat out of their budgets. ""There are still places where we can find significant savings without cutting programs for people who desperately need them,'' she told Newsweek. Her state treasurer is busy drawing up audits of towns, counties and school districts to show where the cuts could come. Many mayors from both parties are enthusiastic about her help. But others complain that a few spendthrift municipalities do not represent the rest. ""Our new governor says we have to tighten our belts,'' says Robert Reiher, Republican mayor of West Caldwell, N.J. ""And we say, "Gee, Governor, that's great, we've been doing that for the last 15 years'.'' A 1976 law already prohibits local budgets from rising more than a few percentage points a year, which barely keeps up with inflation. Mayor Bollwage says: ""We're not spending money like drunken sailors in this state.''

Whitman faces a $2 billion gap in next year's budget, and still has to cut an additional 15 percent from income taxes to fulfill her campaign pledge. Making the numbers add up won't be easy. Mayors are claiming that the state skims a hefty percentage off the taxes it supposedly collects on behalf of local governments, and they want that money back. And even Whitman's allies complain that various state laws make local government more expensive than it needs to be, particularly in negotiating with police and fire unions. Bret Schundler, 35, the Republican mayor of Jersey City, says he suffers from these regulations no less than Whitman suffers from federal ones. Whitman has promised to roll back state regulations -- that's the essence of her message. But she has a lot of promises to keep.