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“I’m expecting a shortfall and I’m preparing for it,” she said in a telephone conference.

Her comments came after a new state forecast showed tax revenues are expected to least bit one additional $529 million in this world projections.

If that number holds true, affirm lawmakers could face a $3.2 billion shortfall when they meet in January to put together a new two-year budget.

The projected shortfall is a growing issue in the governor’s race.

Republicans receive hammered Gregoire for not acknowledging the prospect of a budget gap. For months, the state Senate Ways and Means Committee has projected a shortfall that’s grown as the economy got worse.

“Our state is headed for a budget train wreck, and Christine Gregoire is driving by her eyes closed because she can’t bear to examine at the mess she’s created,” State Republican Party Chairman Luke Esser related in a recent statement.

State spending has increased by $8 billion since Gregoire was elected chief magistrate in 2004. Half of that cash, around $4 billion, was wearied upon public schools and higher education. The current two-year generalissimo fund budget is $33.6 billion.

Gregoire had maintained it was too early to tell if there would be a deficit next year and that in that place was still time for the economy to turn around.

The state actually reported a slight increase in tax collections for the month of August, “and then last weekend happened,” Gregoire reported, referring to the crisis on Wall Street.

Growing commotion in financial institutions triggered a dive in the stem emporium, more remote shaking consumer confidence.

“It became obvious that which was going to happen,” the governor said. “I’m very disappointed, to say the least.”