Unless the sputtering economy takes a sharp upturn, a leading economic adviser fears state agencies could face midyear budget cuts as early as September.

"The handwriting is on the wall," said State Board of Economic Advisors Chairman John Rainey, head of the agency that forecasts revenue projections. "We would be whistling past the graveyard if we said we would meet the revenue projections for 2003-2004 based on the data we have now and the extrapolation of that data over the next 12 months."

The new fiscal year began July 1, and revenue figures won't be available for the current month until mid-August. But Rainey said Friday that May and June returns he's seen from the past fiscal year leave him pessimistic.

"Things just fell off the roof," he said. "That means underlying economic activity is not heading in the right direction."

Final year-end tabulations will not be available until mid-August, Comptroller General Richard Eckstrom said.

He declined to speculate on what the numbers might say because he said all the figures aren't in, but Rainey said the state will not meet its projections for the last two months of the year, an ominous sign for the current budget year.

If a cut is made, it would be the sixth mid-year cut since May 2001. This year's budget emerged from a tough S.C. Legislative session in which lawmakers grappled with revenues that actually decreased for the first time in 40 years.

Rainey's comments came a day after Gov. Mark Sanford said on a live call-in television talk show that without an unexpected surge in the economy, he fears budget cuts are inevitable."Both the national, and particularly in our state, the economy has faltered," the governor said.

Neither he nor Rainey gave specifics of how deep the cuts might be, but Sanford spokesman Will Folks said Friday the state is expected to fall significantly short of revenues to balance the $5.3 billion state spending plan the Legislature approved in June.

"All the estimates we have seen looking forward to this budget year indicate shortfalls anywhere from a half billion dollars to $800 million," Folks said. "We have $170 million (shortfall) in health care alone."

House chief budget-writer Rep. Bobby Harrell, R-Charleston, thinks it's too early to say how short the budget will be.

"I haven't seen those numbers," he said, referring to Folks' remarks.

The governor's office pointed to higher unemployment, sagging consumer confidence and unsteady capital investment as signs the state's economic health is not well. The state's jobless rate rose to 6.6 percent in June from 6.2 percent in May, and the state reported 31,500 fewer jobs than a year ago.

As hard numbers on revenue start to come in next month, Rainey expects to have a working session with the Board of Economic Advisors and revise the revenue forecast downward in September.

Working from that report, the five-member Budget and Control Board could order across-the-board cuts to reduce every state agency's funding for the fourth consecutive year. Some agencies already have seen reductions of up to 40 percent.