As state lawmakers begin crafting the next budget, they are facing the prospect of deep cuts in federal dollars coming into the state.

President Barack Obama’s budget director told agencies this week to expect 5 percent less funding and develop plans for 10 percent less.

The lead budget-writer in the state House is watching what happens in Washington. State Rep. Terry England said even though state tax collections have been growing for a year, August has been a rough month for markets and the economy.

“We could easily see the state revenue either flatten or start into a downward trend again,” England said. “So when you compound that on top of bigger holes or bigger gaps because of federal spending being cut, it starts compounding things pretty quickly.”

Federal dollars help Georgia and other states pay for everything from road construction and health care to education and heating assistance.

England said he hopes Congress won’t force states to make up for funding that the federal government cuts.

“I’ve just signed letters to our Congressional delegation [Friday] morning to mail off to them asking basically to look at those things and not push down unfunded mandates to the state and allow some flexibility in areas that typically we don’t have flexibility,” he said.

England said he and other lawmakers on the House appropriations committed started planning for less federal money after Congress reached a debt-ceiling deal and cuts became imminent.

England said the governor is also planning for federal cuts by asking state agencies to cut their spending by 2 percent next year.

Tags: state budget, White House, state budget cuts, State Representative Terry England, House Appropriations Chairman Terry England, federal budget cuts, Office of Management and Budget