HARRISBURG -- The state's budget problems are so serious that some sort of tax increase may be needed to erase a deficit that's $2.35 billion and still growing, the state House Appropriations Committee chairman said yesterday.

"I believe there will be some sort of a tax increase in order to solve this problem," Rep. Dwight Evans, D-Philadelphia, told reporters yesterday. "But a tax increase should be the last, last, last resort."

Mr. Evans refused to say if the Legislature would consider increasing one of the state's "broad-based taxes," such as raising the 6 percent sales tax (7 percent in Allegheny and Philadelphia counties) or the 3.07 percent personal income tax. The income tax rate was last raised in January 2004.

"That is the real debate, whether it will be a broad-based tax or something else," he said. "Members [of the Legislature] will have to make that determination" by July 1, the deadline for adopting a new budget.

Gov. Ed Rendell has spoken of enacting a first-time tax on cigars and smokeless tobacco, or some sort of severance fee on natural gas pumped from Marcellus shale. But those levies wouldn't raise the hundreds of millions that are needed.

The budget for fiscal 2008-09 is $28 billion. The state is already facing a shortfall in tax and investment revenue of $2.3 billion, plus nearly $50 million more in increased costs to retire debt and meet higher prison costs and medical assistance costs, Mr. Evans said.

Tax revenues will continue to lag into fiscal 2009-10, which starts July 1, Mr. Evans said, predicting an additional $2 billion shortage in revenues next year plus $1.2 billion more in higher medical and prisons costs.

If nothing is done to raise more revenue or reduce costs, Mr. Evans said, the red ink will reach $5.5 billion by the end of fiscal 2009-10 on June 30, 2010.

Tax increases are just one of five factors that will be used to balance the budget, he said. The others are: using some or all of the state's $750 million Rainy Day Fund for economic emergencies; getting the federal economic stimulus funds; "increased efficiencies" in government, such as a hiring freeze; using the Legislature's $200 million reserve fund; and sharp cuts in state programs.