HELENA -- If state revenues don't grow at a faster clip than they are in the current two-year period, the 2005 Legislature could face a $235 million general fund deficit as it tries to balance the state budget for the next two years, a top legislative analyst said Thursday.

''We need $235 million to basically stay status quo from the current biennium," Terry Johnson, a principal legislative fiscal analyst, told the Montana Taxpayers Association's annual meeting.

Without that infusion of higher revenues, the 2005 Legislature and Montana's new governor could face a deficit similar to the $232 million potential deficit that confronted the 2003 Legislature and Gov. Judy Martz earlier this year. Lawmakers and Martz made a series of what some felt were painful budget cuts and approved some tax hikes difficult for some to swallow to balance the budget for the current two-year period ending in mid-2005. The 2005 Legislature must adopt a budget for the two years ending in mid-2007.

''We need sufficient growth in our revenue or we'll have a problem," said Johnson, the Legislature's chief revenue analyst. ''We do have to have some pretty substantial growth to recoup $235 million. If the growth is not sufficient, the next Legislature will be stuck addressing some kind of revenue enhancements or expenditure reductions."

It will take a 5 percent annual growth in personal income -- far above economic forecasts -- from individual income taxes to make up the $235 million potential deficit, he said.

Johnson emphasized later that he had not done a complete revenue forecast or a full analysis of present law expenditures yet. Here's how he came up with the $235 million figure:

In 2005, the state will no longer have $100 million available because of an income-tax cut passed this year that doesn't take effect until Jan. 1, 2005, and the unavailability of one-time money used to craft the current budget.

Revenues for this two-year budget period are trailing projections by $50 million.

The state faces $85 million more in increased spending for 2006 and 2007 than it did in 2004 and 2005 for a state employee pay plan, public school repairs and local government payments from the state. Other obligations include increased costs for human services and corrections.

Johnson also sounded a warning over how the projected ending fund balance for the end of the current two-year budget period that ends in mid-2005 has dropped from the $46 million figure set by the Legislature to $37 million.

If Montana suffers through another bad fire season, that could drop the projected surplus further and lead to more budget cuts, he said. If the projected surplus drops to $26 million, that trigger requires the governor to begin ordering budget cuts for certain state agencies.

''All it would take is a fire season next summer similar to this year, and we're in a situation where budget reductions would have to take place," Johnson said.

The state spent about $28 million on firefighting costs this year, but has budgeted $7 million for next summer, which Johnson said is the state's five-year average cost.

Another speaker, consultant Larry Huss of Portland, Ore., outlined similar financial problems faced by Oregon. Both Montana and Oregon rely on income and property taxes but have no general sales taxes, despite numerous attempts.

Huss, a Miles City native, previously practiced law in Helena before going to work for the telephone company that eventually became Qwest.

He said voters wouldn't accept a tax overhaul unless the Legislature or the public does certain things. The list includes capping state government spending and allowing it to grow no more than a combination of the inflation rate and population growth rate. All taxes also must be capped, he said, and a supermajority of the Legislature must approve any tax increases. If any tax increases are passed, they can only be temporary, Huss said.

He heads a consulting group that has worked with Oregon entrepreneurs to push the Legislature to revamp that state's public employees retirement system, which faced a $20 billion potential deficit.