Washington State revenue is now expected to drop by a previously unexpected $1.2 billion over the next three years, which means the governor and state legislature are going to have to find $385 million more in cuts or new revenue during the coming legislative session.

How are they going to manage that? Governor Christine Gregoire, calling this new forecast a "great surprise," sounds like she doesn't know where else to cut, after having already ordered 6.3 percent across-the-board cuts for all state departments after the last bad budget news broke. In a statement today, she said:

I have been working with legislative leadership in both parties to collect ideas on how to address our current shortfall. This forecast has added even more urgency to those discussions and I’ve asked them to provide their options to me by November 29. Quite frankly, we can’t cut any deeper without ending significant programs. Extremely difficult choices must be made and given this sharp revenue decline, they must be made now.

As Governor I have limited tools in how to deal with these shortfalls. With the 6.3 percent across the board cuts currently being implemented, I have already pushed that option to the limit. The Legislature will need to act quickly—delay will only deepen the problem and limit the options.

In other words: Hey state house and senate, you guys figure this mess out.