Gov. Butch Otter on Wednesday ordered top state administrators and department heads to revisit their 2009 budgets and find ways to save money to offset a nearly 6 percent projected shortfall in state revenue.

In a letter to the administrators, Otter said the revisions are necessary because of the downturns in the state and national economies that have left Idaho's general fund with $174.3 million less than anticipated.

By next Wednesday, Otter wants each state agency and department to submit three new versions of their fiscal year 2009 budgets for review. The revised spending plans should account for cuts, or holdbacks, of 1 percent, 2 percent and 2.5 percent, according to the letter, which was also sent to state lawmakers.

"If we stay on our forecast, we're going to be short of making the state budget," Budget Director Wayne Hammon told The Associated Press. "I don't see Idaho falling off the edge of the Earth, either. But if things continue to go the way they are trending, we are going to have to make some cuts to stay on budget."

The Department of Financial Management projects revenue for the remainder of fiscal year 2009, which began July 1, at $2.766 billion, down 5.9 percent from the $2.94 billion projected in February.

Agency economists attribute the decline to factors typical during prolonged economic slumps, such as people spending less, job layoffs and stagnant corporate earnings.

In its August report, agency economists cited softening sales tax and individual income tax receipts. But the report also points to tax declines tied to the grocery tax credit and other tax relief bills approved by lawmakers last session.

State law gives the governor the authority to impose temporary, midyear reductions in general fund spending.

Hammon said there is no target date for Otter to issue an executive order should cuts be deemed necessary. A review of the revised department budgets could begin as early as next week.

The letter does not offer department administrators specific guidance in how to draw up their revised budget proposals, though they will be expected to target areas that can lead to ongoing savings.

"We haven't identified areas to trim. They are the experts," said Jon Hanian, Otter's spokesman. "The idea here is we're preparing for the worst and hoping for the best. We're hopeful we won't have to do this, but if these projections run true, we're at least ready."

Some departments will not be affected by the cuts because their revenues come from sources other than the general fund, including the Transportation Department, whose revenues come from fuel taxes, and Fish and Game, which collects hunting and fishing license fees.

Otter said cuts will not directly affect public schools because any money dropped from that budget would be offset with money drawn from a separate Public Education Stabilization Fund, created by lawmakers in 2003 and bolstered with $100 million during a special session two years ago.

Idaho is not alone among states struggling to make ends meet.

Last week, Hawaii Gov. Linda Lingle issued emergency orders for the state to cut spending to balance a deficit that could reach $1 billion by June 2010.

Ohio Gov. Ted Strickland, facing an estimated $540 million shortfall, ordered budget cuts last week that could lead to layoffs of hundreds of state workers and closure of two state mental hospitals.