New Jersey's financial troubles, which include revenue and pension shortfalls, could "eat us alive" if they aren't addressed quickly, says Gov. Chris Christie.

Christie vetoed more than $1 billion in tax increases Monday, because he said they would push families and businesses to leave New Jersey.

"I have a constitutional requirement to balance the budget, and I have a state that's already high-taxed. I'm not going to raise taxes on the people in the state of New Jersey and drive more people out," he tells CNBC.

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As for New Jersey's public pension system, it will reach a "tipping point" in the next fiscal year, when it will pay more for retirees' health insurance than it will for active employees' insurance, a first in the state's history, Christie explains.

"We need to fix this system or it will eat us alive. We need to speak in stark, plain, understandable terms to people. . . . They will understand, and when they do, they will empower us to take action," he argues.

Meanwhile, a recent report from the National Association of State Budget Officers says that state budgets have stabilized. "But progress remains slow for many states," it states.

"According to executive budgets, general fund spending is projected to increase by 2.9 percent in fiscal 2015. This growth rate is less than the historical average, although inflation is also currently low."

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