RICHMOND, AUG. 2 -- Gov. L. Douglas Wilder, stung by criticism that the state government's projected $1.4 billion tax shortfall resulted from inept forecasting, launched a vigorous defense today of his administration's fiscal management.

Wilder said his government, which announced a sharply expanded shortfall Wednesday, was blindsided by the same economic slowdown that has caused the federal government and many private firms to underestimate revenue.

"Look at Washington. You can see how this {shortfall} would be the case," Wilder said, referring to the Bush administration's own recently revised figures on the health of the economy.

Wilder added that most experts were as "surprised" as he was by the rapid cooling of the economy, and that he took the most responsible approach by announcing the drop in tax revenue growth as soon as he learned of it.

However, some fiscal experts questioned the state's forecasting methods and said state officials were overly optimistic about continued growth in Northern Virginia.

"We were too bullish in our outlook," said Roy L. Pearson, director of the Bureau of Business Research at the College of William and Mary. "We got very used to the high growth."

"Numbers don't jump around that wildly in that short a span, so there is a problem with forecasting techniques, I suspect," said Carl F. Juncker, assistant school superintendent for finances in Fairfax County.

At the same time, Republicans pounced on the dire fiscal news to bash Wilder and other Democrats who have controlled the governor's mansion for the last decade.

"The cause {of the shortfall} is nine years of unrestrained spending by the Democrats who run Virginia with an iron hand," said Del. Frank D. Hargrove (R-Glen Allen), adding that Democratic "budgets have been larded with pork."

In recent months, Wilder's government has faced ever-escalating estimates of budget shortfalls, first in the fiscal year that ended June 30 and now in the two-year $26 billion budget underway. His Wednesday announcement of the $1.4 billion shortfall, though, dwarfed earlier projections and was termed by Wilder as the state's worst fiscal crunch since World War II.

Wilder's finance secretary, Paul W. Timmreck, attributed three-quarters of the shortfall to changing assumptions about the performance of the state's economy, blaming the rest on the state's failure to accurately predict the impact of various changes in the tax code.

"Because they're forecasts, by definition they're going to change," Timmreck added. "Everybody is missing {targets} . . . . This is not an exact science."

Timmreck said the newest estimates are based on predictions that the state's tax revenues will grow 3 percent this year, compared with up to 11 percent in recent years. He said state officials believe the state economy will experience sluggish growth but not slip into an actual recession.

Nowhere have the state's economic assumptions changed more dramatically than in Northern Virginia, a region that for years was the state's economic engine but now lags behind other parts of the state in such key economic indices as employment growth, Timmreck said.

Timmreck noted that employment growth in Northern Virginia has been cut in half since last year, leaving it roughly tied with the Richmond area as the state's poorest-performing region.

In Northern Virginia, the national economic slowdown has been exacerbated by construction that has produced a glut of empty office buildings and left developers, architects, engineers and laborers without work. Moreover, the region is bracing for expected defense cuts, as federal contractors compete for the fewer contracts doled out by the Pentagon.

However, some regional experts said the slowdown was inevitable after a decade of blistering growth and should have been foreseen.

"Anybody who made a forecast that {the boom} was just going to continue {and} continue forever is going to be disappointed, because inevitably it had to slow down," said Jay Langford, of the Metropolitan Washington Council of Governments. COG also released an economics trends study today reporting that despite slower growth, the region's economy is still fundamentally strong.

Others wondered why Maryland had not seen similar budget shortfalls, given that it relies as heavily as Virginia on tax revenue from its wealthy Washington suburbs.

"I'm a little puzzled as to why if it's so bad in Northern Virginia, why it isn't so bad in Montgomery County, or whether the state {of Maryland} simply hasn't said so yet," said George W. Grier, of the Greater Washington Research Center.

Maryland budget officials, though, said they foresee nothing approaching the problems encountered by Virginia. Although the state does not have as large a surplus as it had become accustomed to in recent years, officials predicted no deficits.

"We're not in the predicament of our sister states," said J. Basil Wisner, Maryland's chief deputy comptroller. "Part of that is sound fiscal management."

The District has not been so fortunate, however, with city officials scrambling to close a projected $90 million deficit this year.

In Virginia, the impact of the expected shortfall remains cloudy.

Wilder has said he that plans to divert more than $300 million in lottery profits that were slated to pay for capital projects, particularly new college buildings, and that everything else is on the table except a tax increase. The governor is expected to present a specific plan to legislators Aug. 16 and until then, local and state governments are left to wonder.

Major transportation projects probably won't be affected because most are financed from trust funds supported by user fees such as gasoline taxes, rather than general fund money, according to Transportation Secretary John G. Milliken.

The picture looked more bleak for education and human services spending, both of which soared in Virginia during the 1980s.

Health and Human Services Secretary Howard M. Cullum today said layoffs are inevitable and that, in a worst case, 500 to 700 of his agency's 20,000 employee positions would have to be eliminated over the next two years.

On college campuses, lottery-funded construction projects are likely to be delayed as much as two years or more.

The University of Virginia, for instance, had planned for months to break ground Friday on a new $6 million classroom building that now may be shelved for lack of funds. "It may be a long time between shovels," said spokesman William H. Fishback Jr.

School officials in Northern Virginia said they expect to be protected from the worst of the funding cuts expected to be announced Aug. 16 by Wilder. With schools set to open in a month, all teachers have been signed to contracts and since more than 80 percent of education spending is for personnel, it's too late for major reductions, they said.

Fairfax County Board of Supervisors Chairman Audrey Moore said the government and schools will simply have to absorb any cuts in state aid. Asked if she had a contingency plan, she answered, "It's called a taxpayer increase and, no, we're not considering that."

Staff writers Alice Digilio, Stephen C. Fehr and Richard Tapscott contributed to this report.