In explaining her budget for 2007-2009 to reporters this morning, Gov. Christine Gregoire said that because of an expected slow down in the state economy, her budget office was forecasting a $300 million shortfall in the subsequent budget for 2009-2001.

But that didn't worry her:

"We're investing in our economic future. We're putting savings aside. So I think we have done the exact, fiscally responsible thing.

"As we project out over the budget, if that's your fundamental question, it looks like in 09-11 we could have a $300 million shortfall. In a $30 billion budget, I don't think that in any way says that we're not moving toward getting off the roller coaster, getting rid of the booms and busts and being responsible in respect to the state budget."

What about twice that?

Soon after Gregoire finished the press conference, her Office of Financial Management e-mailed legislative fiscal committee staffers to say there was an error in the long-term outlook. The budget staff seriously underestimated pension costs in the six-year outlook, and wrote:

This means we're in the hole another $332 million more in FY 2011.

That means the $300 million shortfall Gregoire talked about is actually forecast at $632 million.

The balance sheet posted on the OFM Web site was removed and replaced with this message:

The six-year outlook is currently being updated and will be posted shortly.

UPDATE: The actual number on the updated outlook, which was just posted, shows a $653 million shortfall. And that's the shortfall if the entire $553 million, brand-new, rainy day fund is spent, too.