HARRISBURG -- With state tax revenues declining due to the ongoing national economic crisis, almost all state officials agree that 2009 will be a tough budget year.

But Rendell administration aides said today it's far too early to even talk about the potential for seeking an increase in the state's two biggest money-makers, the personal income tax or the state sales tax, in 2009.

For July-September, the first three months of the 2008-09 fiscal year, state revenues are already $281 million below the estimates that were just made in early July.

Some senators, at an Appropriations Committee meeting today, said that if the economy doesn't pull out of its current nosedive, revenues could be off by as much as $2 billion to $3 billion by the end of the fiscal year June 30.

Even if the Legislature decides to spend the entire $750 million Rainy Day Fund (a special fund stockpiled for emergencies), and puts off $400 million in additional education spending and scraps the current phase-out of the Capital Stock and Franchise Tax, senators said the state could still be more than $1 billion in the red by June.

"We are in dire financial straits," said Sen. Vincent Fumo, D-Philadelphia.

Senators asked Mary Soderberg, state budget director, whether Gov. Ed Rendell might propose a tax increase when he makes his 2009-10 budget speech in February. She refused to say, one way or the other. She didn't rule it out but quickly said it's far too early to be talking about tax increases. She said the state has some new revenue sources, such as $191 million for leasing land for natural gas exploration under areas of Marcellus shale.

Chuck Ardo, a Rendell spokesman, said $2 billion deficit projections are "sky-is-falling projections, doom and gloom scenarios, which are unfounded at this point. The administration continues to monitor the revenue situation and make adjustments to the enacted 2008-09 budget as needed."

Mr. Rendell has already ordered a hiring freeze and told departments to trim their budgets by 4.25 percent, intended to save $200 million in the state's current $28.3 billion budget.

Mr. Rendell did seek, and get, a personal income tax rate increase in 2003, his first year in office, due to lagging state revenues from 2001-2003, but Mr. Ardo said it's far too soon to talk about that subject.