After four years of healthy budget increases, Gov. Jon Huntsman Jr. will take a dramatically different course today when he releases his financial proposal for the coming year, with drastic cuts expected across state government.

In preparing his budget, Huntsman has asked department heads to propose budget cuts of up to 7 percent, a figure that could mean several hundred million dollars in reductions from the $11.6 billion spending blueprint he proposed last year.

"We've been very proactive about dealing with the shortfall in expected revenue, so this budget is incorporating those lowered expectations," said Huntsman's spokeswoman, Lisa Roskelley. "It's a difficult time."

How bad is the state's budget picture?

"Just think of a falling rock," said incoming House Speaker David Clark, R-Santa Clara. "We're going in the wrong direction. This could be, from my perspective, dollarwise, by far the most significant single-session cutback that we have ever experienced."

That includes, he said, some $700 million that legislators had to cut in 2002 and 2003.

"I think our challenges are certainly going to exceed that number," Clark said. And while the budget is bigger now than it was then, "I don't think this is going to be any less painful."

The budget cuts are especially painful for those who face job losses or find themselves in need during the economic downturn, said Linda Hilton of the Coalition of Religious Communities. Last week, the Crossroads Urban Center provided 3,558 Thanksgiving dinners to needy families, the third-largest number in roughly four decades.

"I would hope that when the governor was looking at budget cuts, he would look at it with a heart and consider what budget cuts will least affect Utah's citizens' basic needs and basic health and well-being," she said.

Huntsman's budget serves mainly as a request and outline of the governor's priorities. Legislators are not bound by it in any way, and generally chart their own course.

Senate budget chairman Lyle Hillyard, R-Logan, said Wednesday that the new revenue estimates show ongoing tough economic times in the state.

"I know it has continued down, more even than when we were in the special session" in September, where lawmakers plugged a $354 million budget hole.

Hillyard said Huntsman has expressed interest in tapping into the state's Rainy Day Fund, which has about $414 million stashed away, and in borrowing money for road construction projects. That would help soften the blow from budget cuts.

The question, says Hillyard, is: "Do you think we've bottomed out, or do you think we still need to reserve money?"

He said he is of the opinion that the economic situation will deteriorate further, and the state should squirrel away some money and not push up against its credit limit.

How much to tap those reserves will likely be the major struggle in the upcoming legislative session, Hillyard said.

One potential wildcard is a federal stimulus package that President-elect Barack Obama is advocating, which could mean millions of federal dollars for construction projects.

Huntsman will meet with incoming legislative leaders this morning to brief them on his budget request. They will also discuss whether to convene a special session, perhaps this month, to address the rapidly worsening budget outlook before they convene in their general session at the end of January.

There is a general consensus among legislative leaders that the emergency session would be appropriate, rather than waiting two months while the problem potentially festers and grows.

Outgoing Senate President John Valentine, R-Orem, said it is his understanding that the governor will set three levels of priority for items in his budget request.

"There's going to be the absolutely essential that you have to do. You have to keep the schools open. You have to keep the highway patrol going," he said. "And then there's going to be a second tier that will maintain the quality of life in Utah."

Then, he said, there is a third tier of items that would be considered luxuries -- nice to have if the money is available.