Gov. Timothy M. Kaine says Virginia’s revenue forecast is bleak and will require more and deeper spending cuts.

Kaine isn’t saying where he’ll cut, only that programs spared reductions previously are on the block.

"The need to engage in [another] round of budget reductions will mean, by necessity that all programs — including those previously held harmless — and all available strategies will be on the table for review," said Kaine.

So dramatic is the decline in revenue because of the tough economy, Kaine said, he’s ordering immediate reforecasting of the cash stream from the state treasury.

Usually, the governor would receive a fresh revenue forecast in November, in the run-up to the General Assembly session.

Kaine is laying out the bad news in a report this morning to the legislature’s money committees. This is a required end-of-summer appearance before the House Appropriations and Finance committees and the Senate Finance Committee.

"As we look ahead into the likely revenues for the current .¤.¤. budget, there are some troubling trends," said Kaine.

The primary revenue sources most closely tied to the economy — withholding and sales taxes — are down dramatically, Kaine said.

Sales tax collections have grown less than 1 percent in recent months. They’d have to grow nearly 5 percent to reach the current forecast, Kaine said. Income tax withholding is up just over 1.5 percent, and it would have to grow 6.4 percent to reach earlier targets.

"The task that lies before us will not be easy," said Kaine. "The cuts we have made over the last year — cuts based on solid data and careful prioritization — have been tough. The next round will be more difficult."

Kaine and the General Assembly have already carried out $2 billion in reductions, a consequence of an economic downturn that hit the state more than a year ago.

Legislative reaction was predictable.

House Republican leader H. Morgan Griffith of Salem said Kaine had been slow to act.

"The governor had no action plan," said Griffith, adding the longer Kaine waits to fashion a budget-balancing program, the deeper Kaine will have to cut.

Sen. R. Edward Houck, D-Spotsylvania, a senior member of the Finance Committee, said Kaine is merely responding to "the stark realities of the economic times we’re in."

Houck said it’s too early to say where the governor should cut to offset the growing cash shortfall.

— Jeff E. Schapiro