BOISE - Idaho may see more budget cuts next year.

At the state of the state address back in January, Governor Otter announced the state faced an 83 million dollar budget shortfall.

To pick up the slack, public areas like schools took massive cuts.

Now the state is losing even more money.

Idaho has 41 million fewer dollars than Governor Otter projected back in January.

And in an already troubling economic time, that's not a good sign for public institutions.

"The signs are not good. The fact that we're down another 15-million dollars in February in income tax is not a good sign," said Governor Otter. "We've spent most all the rainy day funds. There's no savings like we had last year. We had the opportunity to plug some money back into the system because we had some savings accounts. We've spent the savings accounts."

I asked Governor Otter what we will do if we don't make up this tax shortfall later in the year.

His answer was a little vague.

"Caution on how much money we spend and how much commitment we make on the that money should be the order of the day," said Governor Otter. "Obviously we have to change with the income."

But economists are hopeful.

They think a turnaround is just around the corner.

"You will see some improvement in tax revenues in the second half of the year as the economy gets better," said Jeff Thredgold, an economic futurist. "Communities in the state are trying to be as prudent as they can with expenditures. They're not taking the easy way out like Oregon did. No massive tax increase."