That’s the word from state Rep. Jim McIntire, a Seattle Democrat, state treasurer-elect and chairman of the state’s Economic and Revenue Forecast Council. The council received its gloomy quarterly economic report Friday, a preview of a revenue forecast report that it’s scheduled to receive Nov. 19.

The bad news could translate into a budget shortfall of as much as $4 billion in the next budget cycle – up from the $3.2 billion shortfall predicted just two months ago by the state’s top forecasters.

“Clearly, our forecast for November is going to be lower,” McIntire said.

He said the state’s economists are forecasting a four-quarter recession, which they think began in the third quarter this year.

That means the economic contraction would run until July or August 2009. It would include a quarter of actual shrinking in economic activity, McIntire said.

Former Gov. Gary Locke has said recently that he thinks the worsening economy could give the Legislature a $4.5 billion shortfall to contend with in January, but McIntire, who soon will move into the treasurer’s office, expects it to be lower than $4 billion.

Gov. Chris Gregoire ordered a freeze on hiring, personal service contracts, travel and other costs in the summer and more recently ordered additional reductions. Those savings, when added to the state’s more than half-billion-dollar rainy-day fund, would reduce the $3.2 billion gap to $1.7 billion.

Gregoire reportedly is looking at additional cuts.