HARRISBURG -- In view of state's growing fiscal problems, General Assembly leaders should begin budget meetings in January to consider spending proposals line by line, rather than waiting until late June as they usually do, House Speaker Dennis O'Brien said today.

The process of putting together a state budget for fiscal 2009-10, which begins July 1, "should start in January," said Mr. O'Brien, who is finishing up his first two-year term as speaker.

"We know we face difficult revenue projections. We can't wait until the last minute," he told those at the monthly Pennsylvania Press Club luncheon. "We have to assemble an on-going dialogue to really look into the budget."

He also said that every spending item should be closely scrutinized to see if it's the right size, or whether it can be reduced. Any proposed increase in spending must be justified in detail, he added.

All legislators agree that the 2009-10 budget process will be difficult. For July-September, the first three months of fiscal 2008-09, state revenues were nearly $300 million below expectations, and many legislators fear the shortfall could be between $1 billion and $2 billion by the end of the fiscal year June 30.

Normally, the governor, in early February, proposes a budget for the new fiscal year that starts July 1, but legislative leaders often don't begin serious discussions about it until June.

Such a timetable is unacceptable now, Mr. O'Brien said, with the state facing the strong possibility of having to raise taxes or slash significant programs starting July 1.

But there's a major question about whether Mr. O'Brien will even hold his present leadership position in January, when he wants the budget meetings to start.

He became speaker in January 2007 as a compromise candidate, when House Democratic leader Bill DeWeese couldn't get the minimum of 102 votes he needed to be speaker. Mr. O'Brien, a Republican from Philadelphia, then got the votes of 99 Democrats and a handful of Republicans to oust former Republican Speaker John Perzel. It's the first time in anyone's memory when one party -- Democrats -- controlled the House (by a slim 102-101 margin) but the speaker was from the other party.

Whether Mr. O'Brien gets a second term as speaker depends on the outcome of the Nov. 4 election. If Democrats widen their current one-vote margin of control, then a Democrat is almost certain to want to be speaker.

That list includes Mr. DeWeese (if he defeats determined GOP challenger Greg Hopkins on Nov. 4), House Democratic Whip Keith McCall of Carbon and House Appropriations Committee Chairman Dwight Evans of Philadelphia.

If Republicans regain control of the House, Mr. Perzel, or perhaps House Minority Leader Sam Smith of Punxsutawney, is likely to run for speaker.