OLYMPIA, Wash. -- The sour economy is overwhelming the state government.

Just nine months after the Legislature solved a $9 billion deficit, the state has found itself swamped in more oceans of red ink.

Your confidence is low. You are spending less. Sales taxes are down. Business tax is down.

The new state deficit: more than $2 billion.

"Behind those numbers are real people," said Gov. Chris Gregoire. "Are kids going to school? (What about) kids that can't get aid to go to one of our universities? Families that are struggling, or senior citizens relying on going to a nursing home? So it is a very tough time for the state."

Here's what makes it so tough. The state has to fund education. It must fund Medicaid. In fact, federal and state law protects 70 percent of the state budget.

The unprotected budget is just $9 billion.

"So we take about $2 billion out of $9 billion. What is that? Social services, health care, corrections. It's really very, very difficult," Gregoire said.

Here's the math. Budget available for cuts: $9 billion. Cuts needed : $2 billion.That's a 22-percent cut for prisons, health care and human services.

Does that have the governor thinking of tax increases?

"It's tough to talk about sales taxes, because the reason we are in the dilemma we are in is because people aren't purchasing," she said.

The governor added you really can't increase property taxes at a time homes are being foreclosed.

Then how about business taxes?

"We've got too many businesses hanging on by just a thin line or going out of business," she said. "We are in a tough spot right now."

The governor said every struggling family she knows turns to the state as a last-resort safety net when they can't meet their needs.

She hopes President Barack Obama's planned stimulus summit will provide some answers. Gregoire is considering calling a local summit to discuss solutions fit for the Northwest.