Economic woes in Rhode Island could drive the state's budget deficit to nearly $200 million, a gap equivalent to about 6 percent of expected state income.
Budget officials for Gov. Don Carcieri and lawmakers predicted Tuesday that the state's income will drop about $130 million during the fiscal year ending in June.
Among the biggest drops are an 8 percent decline in the sales tax and a 5 percent drop in the personal income tax.
Besides dealing with falling income, the state began the year with a $62 million deficit from the previous year, further aggravating the current budget gap.
Carcieri, a Republican, said in a written statement that state leaders must avoid raising taxes to fix the shortfalls.