Gov. Robert F. McDonnell (R) emerged from a closed-door meeting with legislative and business leaders Monday to say most were looking warily toward Washington, concerned that Virginia will take an outsize hit if Congress and the White House fail to avert the “fiscal cliff.”

Virginia Gov. Bob McDonnell reacts to a reporter's question on Nov. 7, 2012. (Bob Brown/AP)

“It will be a cautious and conservative approach to budgeting to account for these uncertainties in Washington,” he said.

McDonnell had huddled with the Governor’s Advisory Council on Revenue Estimates, an executive advisory council of legislators and business leaders. He meets with the group every year, tapping their expertise as he tries to predict revenue estimates for the commonwealth He uses the estimates when preparing new, biennial budgets or making adjustments to a current spending plan.

But the gathering on Capitol Square took on more urgency this year, with deep, across-the-board military and domestic spending cuts set to take effect in January.

“I would say this year, because of the unprecedented uncertainty with the fiscal cliff, and what’s going to happen or not happen over the next 45 days in Washington, there’s still a very profound sense of caution that exists in the business community, among our legislators,” McDonnell said. “And so, we’ll be taking that information and incorporating those ideas into the budget recommendations.”

McDonnell met with reporters after the gathering, which public-meetings rules permitted to be conducted in private because business leaders shared their own revenue forecasts, hiring plans and other confidential information to help the state estimate future revenue.

McDonnell will use the information as he proposes adjustments to the two-year, $85 billion state budget approved this year. Earlier this month, McDonnell asked state agency heads to suggest 4 percent cuts to their own budgets — another annual exercise that the governor said took on greater significance this year.

If leaders in Washington fail to reach a deficit-reduction deal, automatic spending cuts projected to total $1.2 trillion over nine years are set to begin taking effect Jan. 1.

Virginia would be particularly vulnerable to those cuts for the same reason it rode out the recession relatively well: The state is home to many military installations and defense contractors. Deep defense cuts could cost the state 130,000 to 200,000 jobs, McDonnell said.

“Most concerns expressed relate directly to what’s going on in Washington, D.C.,” McDonnell said.