State tax collections will probably fall short of previous projections so the Legislature should avoid approving any new programs that would cost money, Gov. Mike Rounds said Friday.

Problems in the nation's economy will hurt South Dakota, Rounds said. State sales tax revenue for the Christmas shopping period in December was significantly less than officials had hoped it would be, he said.

"The news is not rosy," the governor said in the weekly news conference he holds during the legislative session.

Rounds said state budget officials will present new revenue estimates in the next week to the Legislature's Joint Appropriations Committee. The panel will hear from economists on Wednesday before deciding how much money can be spent in the next state budget.

The governor's budget proposal already would spend some reserve funds this year and in the next budget year that starts July 1. He earlier predicted about $100 million in reserves would be left by June 2009. If too much is spent from the savings account, the money will be gone, he said Friday.

Rounds said he asked the Legislature to kill one of his measures that would have used $10 million in reserves to start a revolving loan program to help government agencies finance energy-savings projects. That $10 million in reserves might be needed in the next couple of years, he said.

If the Legislature passes any measure that spends state money, it should also identify a source of money to pay for that program, the governor said. Plans to give school districts extra money or raise teachers salaries also must include funding mechanisms, he said.

The House and Senate have proposed very different plans to raise teachers salaries, and each chamber now will consider the other's proposal.

The Senate bill, SB187, would give schools an extra $7.5 million in state aid next year, the equivalent of $59 per student, and require that the extra money be used to give teachers a pay raise. Rounds said he would look at such a plan only if lawmakers identify money to pay for it.

"I want to know where the ongoing revenue is that's going to pay the bill," he said.

Members of the governor's staff have testified against the Senate bill and in favor of the House bill.

The House measure would set up a three-tiered system to pay teachers according to their experience, progress in the classroom and success in getting advanced degrees.

HB1124 would also set a minimum teachers' salary of $30,000 a year beginning in the 2011 school budget year, with school districts expected to find the money to pay increased salaries. Teachers moving to the second and third tiers would get paid more, and the bill would require the state to provide money for that extra salary.

Rounds said he liked an early version of the House bill, but he understands the House has changed it to require increased state spending. This year's Legislature should not pass a new program that requires future lawmakers to find a way to pay for it, he said.

"Unless the Legislature is prepared to add a revenue stream to meet an entitlement, I can't accept it," the governor said.