By Victoria Cavaliere

NEWARK, New Jersey (Reuters) - Hundreds of students walked out of Newark high schools on Tuesday to protest budget cuts that have led to teacher layoffs, school closures and the shrinking of sports and after-school programs.

Chanting "stand up, fight back," students from a dozen area high schools defied threats of disciplinary action, marching to Rutgers Law School where the State Assembly was holding hearings on Governor Chris Christie's proposed $32.8 billion budget.

Christie's proposal includes an all-time high $8.9 billion for public education in the state, including $714 million for Newark schools, that protest organizers contended would underfund the district by about $53 million.

"This $53 million is real; students see it in the cutting of clubs and extracurricular activities, sports, teachers and administration," protest organizer Robert Cabanas of the group NJ Communities United said. "They don't think they should have to see any of those things go."

Officials at Christie's office did not respond to calls seeking comment on Tuesday. When the Governor in February unveiled his budget proposal, he noted that state-wide funding was up, with no cuts in individual districts.

In 2010, Christie's first year in office, the Republican governor cut state aid to schools by $820 million, with urban districts in Newark and Camden the hardest-hit by closures and layoffs. Newark last year shut seven schools and in March handed out more than 100 pink slips to educators and personnel.

Newark is far from alone in feeling the pinch to its schools, as districts across the United States face tight funding from cash-strapped cities and states. Most notably, Chicago last month said it would close 54 schools by the beginning of the next academic year to save money.

The protest was far smaller than a school walkout three years ago that drew thousands.

"We are fighting back anyway," said Breyonnka Anderson, an 11th grader at Fast Track Success Academy. "They are taking away our teachers, our school trips."

(Editing by Scott Malone and Richard Chang)