RICHMOND -- Virginia faces a potential budget shortfall of as much as $2.7 billion over the next two fiscal years, a deficit that could trigger deeper and lasting cuts to state programs, lawmakers learned for the first time Tuesday.

Lawmakers also face the prospect of cutting another $300 million from the budget that expires June 30, as tax collections continue to fall short of official projections.

Gov. Tim Kaine and state lawmakers already have cut about $6 billion from the budget that took effect in July 2008. The cuts have come from the general fund portion of the budget, which was $34.5 billion when the spending plan took effect.

Slow revenue growth also won't be sufficient to meet growing spending needs and offset the expiration of federal stimulus funds during the two-year period that begins July 1, according to a presentation delivered to the House Appropriations Committee during their annual policy retreat.

The prospect of further shortfalls had lawmakers talking Tuesday about the possibility of cuts to public schools and considering the elimination of some state programs to balance the budget.

"I would implore all the members of the House to provide me their input as to how we balance this budget and what specific programs should either be reduced or eliminated," said House Appropriations Committee Chairman Lacey Putney, I-Bedford. "What I don't want is generalized statements of cutting waste and eliminating inefficiency. Neither of those is a line item in the state budget."

Legislative analysts said Medicaid costs account for a large percentage of the projected shortfall over the next two years. In addition to an increased utilization and inflation, the state faces a $1.1 billion gap as federal economic recovery funds for Medicaid expire in the next biennium. Public education costs and state employee health insurance rates also are expected to increase.

Kaine will deliver a new two-year budget to lawmakers in December, less than a month before his term expires.

"We've already cut $6 billion out of the current budget and we're looking at less money than we had hoped for the upcoming budget," Kaine spokesman Gordon Hickey said. "You can't look at a budget and not realize that Medicaid is an issue and the education budget is an issue and everything is being looked at."

Gov.-elect Bob McDonnell will take office in January and confront the task of managing Virginia's finances and working with lawmakers to balance the budget.

"These are challenging times, and today's budget projections are further proof of that fact," McDonnell spokesman Tucker Martin said. "Governor-elect McDonnell will focus on bringing legislators together to make the tough decisions necessary to balance the budget, while positioning Virginia for job growth and economic development in the years ahead."

House Majority Leader Morgan Griffith, R-Salem, said lawmakers should look for permanent cuts in order to free up money for education and other essential services when the economy rebounds.

"I think we should figure out what we can live without and permanently cut that," said Griffith, who attended Tuesday's meeting.

Del. Clarence "Bud" Phillips, D-Dickenson County, said lawmakers could do their part by shortening the upcoming legislative session from its scheduled 60 days to 45 days.

"We don't need to be here 60 days spending money of the commonwealth and the taxpayers who are in these dire straits," said Phillips, a member of the Appropriations Committee. "These budget numbers are scary and they're stark, and they're going to have a grave impact upon the citizens of the commonwealth. We've got to show the citizens of the commonwealth that we're willing to sacrifice, as well."