Pataki said his order, including a refinancing of some state debt, was designed to save about $3 billion over the next 18 months. Pataki budget aides have said the terrorist attacks could cost the state up to $9 billion in lost revenue over the same period.

The state operates on an annual budget of more than $80 billion.

The Republican governor also said he would ask state lawmakers to approve an early retirement plan. Aides said the hiring freeze and early retirement plan would cut 5,000 jobs from the state government work force of more than 190,000 people.

Pataki said he would try to avoid forced layoffs or tax increases, though he refused to rule out delaying some approved tax cuts scheduled to take effect over the next several years.

He also warned local governments and school districts that they shouldn't expect extra aid this year.

Pataki said that he had asked the federal government for a $54 billion rebuilding and recovery aid package, $20 billion of which has already been approved by Congress and President Bush.