New Jersey authorities say they've made great strides since the Sept. 11 attacks in preparing for a terrorist attack. They think the state is a prime target -- which is why they were surprised when their federal homeland security grants were cut more than 30 percent this year.

Matt Mayer, who heads the grant program for the Department of Homeland Security, says awards are based on a complicated formula that factors in population density, critical sites and threat. One element is the number of active counterterrorism cases in a state.

Mayer says there's pressure from every state for more money, and Congress has resisted efforts to award the funds based solely on risk. Even so, New Jersey has received more than $300 million in counterterrorism funds since Sept. 11.

New Jersey Attorney General Peter Harvey says that because of the latest cuts, the state will now have to scale back its plans to purchase field hospitals, decontamination shelters,and protective clothing for search and rescue teams, among other things. He fears it will make not only the state but the region more vulnerable.

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