DES MOINES - A $60 million cut in state spending is on the way after a panel of budget experts projected state revenue for the current budget year may fall nearly $100 million short of previous estimates.

Iowa Gov. Chet Culver's office said the cuts will include reductions in administrative spending, transfers of unused funds and calls for the Legislature to retract spending it had previously approved.

Culver will unveil specifics on the cuts next week, according to a release from his office on Friday.

The new cuts will come in addition to $40 million in spending reductions Culver announced earlier in the week. A gloomy projection from the state's Revenue Estimating Conference on Friday is forcing Culver to trim deeper into the budget.

The three-member panel of budget experts predicted the state will end up with around $6.05 billion in revenue for the budget year ending in June. That's $99.5 million less than the panel's revenue forecast in October.

Panel members also predicted a drop in revenue for the fiscal 2010 budget, which lawmakers will put together during the legislative session beginning Jan. 12.

The panel expects the state to net about $6.03 billion next year, a decrease of $132.6 million from previous estimates.

Charles Krogmeier, a member of the estimating conference, said the state's budget challenges will require further cost-saving measures.

"It's a problem, but it's a manageable problem," Krogmeier said following the meeting.

He said the conference's projections look bleak but shouldn't come as a surprise to state lawmakers, who will use the predictions when crafting next year's budget during the session.

Krogmeier said next year's budget could force lawmakers to consider dialing back funding for important services and priorities.

Education spending, which he said consumes about $2.5 billion of the $6 billion budget, may not be safe from cuts.

"If you take that [education] off the table, say you're not going to do anything with that, then you're making much more drastic cuts in other areas," he said.

David Underwood, a Mason City member of the revenue conference, voiced concern during the meeting that the state's revenue may even fall short of the conference's latest projections.

Underwood said rising unemployment and smaller paychecks for many Iowa workers may cost the state revenue in the coming months, and conference members agreed economic conditions will likely worsen before they begin to rebound.

The conference may have to lower its projections when it meets again in a few months, Underwood said.

Conference member Holly Lyons said she agreed with some of Underwood's concerns.

"It's pretty gloomy, and I'm a little bit nervous that maybe we didn't go low enough," Lyons said.

Iowa House Speaker Pat Murphy, D-Dubuque, called Culver's budget cuts a first step, but he said in a release issued Friday that lawmakers will have to do more to balance the state's budget.

"We will take action in January to keep the 2009 budget balanced. There will be difficult decisions to make, but we will not balance the state budget on the backs of middle-class families in these difficult times," Murphy said.

House Majority Leader Kevin McCarthy, D-Des Moines, said the Legislature will likely have to cut spending for both the 2009 and 2010 budgets, but he pointed to the state's $620 million in reserves as a positive sign the state can handle fiscal difficulties.

"There will be real cuts and there will be real pain, but I do believe that Iowa is in a better position to weather this budget storm than almost any other state," McCarthy said.

Republican lawmakers said overspending by the Democratic-controlled Legislature the past two years set the stage for the current budget challenges.

"In his original budget message to the Legislature, the governor called for a common sense approach to budgeting, not spending more than we take in and not using gimmicks. It's time to stick to those principles. That's what Iowans do, and they expect nothing less from us," House Minority Leader Kraig Paulsen, R-Hiawatha, said in a statement.

Paulsen also said the Legislature should tap the cash reserves to help with disaster recovery costs but not to pay for other commitments.

Rep. Christopher Rants, R-Sioux City, called on Culver to implement a 3 percent across-the-board cut in state spending.

Such a move would save the state at least $180 million and would allow the Legislature to put money back into important services during the session to minimize the impact on programs like Medicaid and education, Rants said.

"You can make arguments why a cut should be larger than that, but it certainly should be no smaller than that," he said.

Contact Fred Love at (515) 422-9048 or fred.love@lee.net.