OLYMPIA, Wash. -- Washington state is staring at a budget hole of about $5.1 billion, after a new economic report showed further weakness in tax collections.

The overall deficit includes a $500 million shortfall in the current budget -- and a $4.6 billion hole in the next two-year budget, taking effect in July.

Gov. Chris Gregoire is working on a no-new-taxes plan to deal with the problem. She's already ordered about $330 million in cuts, and plans to order more.

The deficit will dominate work at the next Legislature, which convenes in January.

Democratic Rep. Ross Hunter of Medina says, "This will be ugly."

Gregoire's budget office has asked state agencies, including higher education, to project what budget cuts of up to 20 percent might look like.