With a budget deficit worsening every day, the state Legislature opens at 10 a.m. Wednesday with leaders prepared to deal out bad news.

For Gov. Linda Lingle, who campaigned for re-election on her stewardship of the state's economy and ability to turn around a deficit in 2003, and for public workers and nonprofit recipients who saw more money flowing to them, this session will be grim. There are few ideas for raising more money, and lots of fear that the state will cut back.

Rep. Marcus Oshiro, who took over the House Finance Committee chairmanship in 2007, says this is not the year for worker pay raises, nor is it likely that nonprofit and charity organizations will get any state money.

“;There is a shortfall this year and a projected shortfall for the next three years, so honestly, I don't know how you can seriously sit down and discuss pay raises,”; Oshiro (D, Wahiawa-Poamoho) said.

He and Senate President Colleen Hanabusa caution that the public employee unions will have to bargain with the Lingle administration, not the Legislature, but no one is saying that public workers will get a raise when the contracts expire in June. As for the state's grants-in-aid, which have been a large source of funds for many social service agencies, Oshiro said he and Senate Budget Chairwoman Donna Mercado Kim are telling local charities “;no.”;

“;Donna and have been telling the nonprofits it is difficult to provide any money at all; they need to look at other sources,”; Oshiro said.

The worst parts of the spreading budget crisis might not

have hit yet. Kim says Lingle is warning that the state Employee-Union Health Benefits Trust Fund, which administers the state's public employee medical insurance program, needs up to $27 million in extra money or must force public workers to pay more for their health insurance.

“;It will be a huge amount to pass on to the employees, but the entire excess funds have been depleted,”; said Kim, who is starting her first year as budget chairwoman.

The EUTF, according to

Oshiro, had been running a surplus, but EUTF officials used a portion of the surplus to subsidize the cost of health care for state workers and also Lingle took portions of the surplus to fund the construction of housing projects for the homeless.

Also, the Council on Revenues, which sets the estimated state tax collection number, meets again in March. Both

Oshiro and Kim predict revenue projections will be lowered again.

So far no one is seriously looking at raising taxes, but Kim said she will bring up legalized gambling. Hawaii and Utah are the only states that do not allow some form of gambling. Neither Kim nor Oshiro expect it to pass this year.

“;I have brought up the issue of gaming, and we should seriously look at it,”; Kim said.

Oshiro said he is willing to “;have the discussion,”; but cautioned that it could not be enacted in time to help with the current budget problem.

Today the two-year $22.4 billion state budget is projected to be $150 million less than the year before, but last year, budget officials had planned for the state to take in 4.1 percent more money. Now instead of growth, they are looking at a downturn of at least 3 percent.