It's looking more likely that the state will need to make more cuts to its budget — be it through additional program cuts, layoffs, furloughs or other means.

For yet another month, the state's revenue collections are worse than what economists had predicted during the summer.

Tax collections for the first four months of the year are now down 10.9 percent from the same period last year, the state Department of Taxation reported in its October preliminary revenue collection report yesterday.

Last month, the tax department reported that revenues were down 9.7 percent. So the situation is worsening.

The state Council on Revenues had projected a 1.5 percent decline for the fiscal year that runs from July 1 through June 30.

State budget officials and lawmakers are required to use the council's forecasts to determine the state general fund budget .

Every percentage point decline in revenues translates to about $42 million more in lost revenues for the state budget, so a 9.4 percent drop from what the council first forecast means a dollar loss of nearly $400 million that needs to be made up somewhere, said Linda Smith, Gov. Linda Lingle's chief policy adviser.

"It's very sobering information," Smith said.

State Budget Director Georgina Kawamura and her staff will take the new numbers under advisement as they get ready to submit their budget to the Legislature next month, Smith said.

"We understand that we're probably going to continue to see a decline in revenues before we see the numbers start to turn around," Smith said.

That means needing to look at further furloughs, layoffs and budget cuts, she said.

Lingle remains reluctant to raise taxes, she said. "She's been pretty firm in that position," Smith said. "She doesn't want to increase taxes because she thinks it would be adverse to bringing us out of this recovery."

Smith noted that revenues have continued to decline even after the Legislature chose to raise taxes last year.

"Even when you increase tax rates, that doesn't mean additional revenues in the door," Smith said. "We're going to have to look at everything, everything's going to have to be on the table."

House Finance Chairman Marcus Oshiro, D-39th (Wahiawä), said what happens this month could be critical.

He agrees with Smith that there likely will need to be more belt-tightening, Oshiro said. But he's also hopeful that the numbers will turn around somewhat in the November figures, which could then buffer what the Council on Revenues forecasts at its Dec. 17 meeting.

The Lingle administration has scheduled its presentation to legislative leaders the week after, just before Christmas.

Looking at specific areas of yesterday's report, the largest category, consisting of general excise and use taxes, is down about 12.9 percent from the first four months of last year. Transient accommodations taxes, also known as hotel room taxes, were also down 12.9 percent from July through October compared to the same four months last year. Individual income tax collections are down 9.6 percent during that same period.