INDIANAPOLIS -- State leaders on both side of the aisle Friday agreed that a tax increase isn't an option to make up a shocking drop of revenue, but more budget cuts could be on the way.

July figures released Thursday showed state tax collections were down $76.5 million from a revised revenue forecast issued in May. That forecast already projected that revenues through June 2011 would be about $1.1 billion less than a forecast issued in April.

The sales tax, the state's biggest money maker, was 11 percent less than a year ago, while the income tax was down 35 percent from last July, an indication that fewer Hoosiers are working, and those still with jobs are working fewer hours.

Budget officials agreed that the situation is worse than expected.

"We don't want to overreact, but we are watching the revenues every day, and we'll be really focused on finding additional ways to cut spending administratively," said Office of Management and Budget Director Ryan Kitchell.

Legislative leaders said there will not be another special session to make further cuts. They'll let Gov. Mitch Daniels do that.

"The governor has the authority to deal with the priorities of the programming, and he can do the cutting," said Sen. Luke Kenley, R-Noblesville. "We've kind of indicated our priorities, and he can see where to cut from that."

Daniels said the state will work hard to make up the shortfall.

"It demonstrates the need for extreme caution," Daniels said. "We're going to pinch every penny and make sure that ends still meet in Indiana, whatever happens in other states."