Virginia Gov. Timothy Kaine told state agencies on Tuesday to begin to look for ways to scale back their budgets by as much as 15%, as he prepares a revised revenue forecast that will likely lead to budget cuts in fiscal 2009 and 2010.

Secretary of Finance Ric Brown said the governor has asked agencies to find targeted cuts that could add up to 5%, 10%, or 15% of their budgets, but that not every agency will such have sweeping percentage reductions.

Brown said the percentages are a base to put “some strategies on the table,” as Kaine and Brown prepare for a major downward revision in revenue estimates, which they will present to lawmakers in early October.

Sources have said that lower-than-expected income and sales tax revenues are expected to contribute to a budget shortfall that could reach more than $1 billion over fiscal 2009 and 2010. This comes after Kaine has already reduced revenue estimates by $2 billion for fiscal 2008, 2009, and 2010.

Sales tax collections grew at an average rate of only 0.8% during the last four months of fiscal 2008. To make the fiscal 2009 forecast, the rate would have to grow to 4.9% during fiscal 2009, according to Kaine. Income-tax withholding grew at an average rate of 1.6% during the same four-month period, and would have to grow at 6.4% to make the 2009 forecast.

The governor had already asked state agencies in July to scale back spending and hold off on filling vacant positions.

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