PHOENIX ÷ Gov. Jane Hull said Tuesday the state's fiscal situation is getting worse and that she will tell state agency directors to take new cost-cutting steps.

Hull told reporters she had not decided yet what to do but that she had her budget staff preparing options and will hold an emergency meeting with her Cabinet on Thursday.

The state's developing shortfall in the state's $6.2 billion budget for the 2002-2003 fiscal year which began July 1 is "very close, maybe a little over" the $300 million benchmark she set in a July 25 letter to legislators, she said.

Options include across-the-board cuts of 5 to 10 percent, though some services such as schools, universities and community colleges would not be cut or at least not hit as hard, Hull indicated.

Also, the Department of Corrections already has sizable shortages in staff, she added.

"There are areas where we won't get to do anything."

Hull said she did not have immediate plans to summon lawmakers for a budget-cutting special session but she did not rule one out before she leaves office in January.

"Will it eventually need legislative authority? Of course it will," she said. "At this point we do not have a plan ready. When we have a plan ready, then we'll talk."

However, Hull said she would not call a special session in the next few weeks.

"I don't think we could get them in before the (Sept. 10) primary election," Hull said. "I'm not that naive."

Hull noted that she let the 2002-2003 budget bills passed by lawmakers become law without her signature because, she said, legislators did not cut enough spending.

"We didn't solve the problem," she said. "Now we will pay the price."

The Legislature's budget staff reported last week that revenues in July, the first month of the fiscal year, totaled $455.9 million, or $25.6 million less than expected for the month when the pre-budget forecast was prepared last spring.

In addition, the 2001-2002 fiscal year ended with less revenue than expected. Closing that budget in the black required use of reserve dollars which lawmakers planned to use to balance this year's budget.

"The 2003 (budget) is a problem. The 2004 (budget) will be a worse problem for the next governor," Hull said.

Budget cuts already have forced universities to cut classes and forgo repairs. The State Parks system closed seven parks but lawmakers, feeling the heat from constituents, last month provided extra funding to reopen them.