With the economy continuing to slow, Gov. Sonny Perdue on Monday lowered by some $310 million his estimate of how much tax money the state will take in over the next year and a half.

That reduction, in effect, will force lawmakers — who are nearly three-fourths of the way through the 2008 legislative session — to begin looking at ways to cut $310 million in projected state spending.

What will be lopped from the $2 billion budget for fiscal 2009, which begins July 1, is not known yet.

However, Perdue is recommending that the state save money by cutting the pay raise for 200,000 teachers and state employees next year. In January, he proposed a raise of 2.5 percent. The governor said Monday that cutting it to 2 percent would save $46 million.

"We have to live within our means, and that's what we'll do," Perdue said.

The governor also will recommend that the General Assembly not fund new school buses and computer equipment this year. He had proposed $65 million in spending on those two items.

Perdue's decision will make it much more difficult for House leaders to keep their promise to end five years of cuts to the state's basic funding formula for schools. Perdue also had recommended in January that the state continue the cuts, which would amount to about $140 million next year and have totaled about $1.5 billion since 2003.

With less money to spend, filling that hole will be much more difficult.

Tax collections were up half a percentage point this February over February 2007, a gain of $4.6 million.

Through eight months of the fiscal year, tax collections are up 1.9 percent over the same period in 2007. The state needs an increase of 3.27 percent to meet this year's budget.

The state has about $1.5 billion in reserves, and it could dip into those funds for any shortfall. Perdue said Monday that he would do so if necessary.

The governor characterized his actions as an attempt to react to the sluggish economy early, before a major downturn causes a fiscal crisis. "I don't feel we can wait for a crisis," he said.

Collections have been down in recent months. The struggling economy has hurt retail sales, particularly in areas associated with housing and home improvement.

Perdue's announcement complicates the job of legislative budget-writers. The House and Senate have been at an impasse for several weeks on the $300 million mid-year addition to the budget for the current 2008 fiscal year, which runs through June 30.

Perdue's new projections mean that $65 million will have to be cut from the mid-year budget. Another $245 million would be cut from the 2009 budget.

Neither chamber has voted yet on a fiscal 2009 spending plan, but the session is down to 11 working days, which probably will spread over most of a month.

The governor has cut revenue estimates before. He did it at least four times during the 2004 session, when a Republican Senate and a Democratic House were at loggerheads on spending issues.

Democrats accused the Republican governor of using his power to reset revenue projects to limit spending. By law, the General Assembly cannot approve spending more money that the governor says will be taken in.

House Republicans, who have had a sometimes stormy relationship with Perdue, had been predicting for weeks that the governor would decrease the revenue estimate to keep them from eliminating the education cuts.