The Budget: Virginia's $50 billion budget is the state's best guess about how much money it will need and how much it will raise over two years. The effects of the weak economy on state revenue have been more severe than budget planners anticipated. The General Assembly and governor will adjust the budget to account for a $1.2 billion imbalance.

History: State leaders were hoping that the worst of the budget crisis was over when they cut $3.8 billion during their session last winter. But weaker-than-expected revenue forecasts led Gov. Mark R. Warner to cut $858 million more on his own authority and ask the legislature to approve his plan for the remaining $1.2 billion problem.

Outlook: A new legislative report warns the General Assembly to expect a shortfall of $895 million for the next budget, which covers 2004-06. The report notes that it took Virginia government five years to recover from the last recession, in the early 1990s.

Elsewhere: The District, Maryland and many other states are feeling the economic pinch. Maryland must reduce its $22 billion budget for next year by $1.2 billion. Two-thirds of states report declining revenue, and more than half of states face budget shortfalls, according to the National Conference of State Legislatures.

On the Web: Primers on the Virginia and Maryland legislative sessions are available on The Post's Web site, at www.washingtonpost.com/vagovt for Virginia and www.washingtonpost.com/mdgovt for Maryland.