NASHVILLE -- State revenue collections were short by $67 million in October, and that figure could climb to $125 million by the end of the fiscal year on June 30, State Finance Commissioner Warren Neel said Friday.

Neel released revenue figures for October that showed tax collections of almost $600 million, a decrease of $19.3 million compared to October 1999 and $35.2 million less than the budgeted estimates for October.

Part of the drop in collections was caused by changes last year in filing dates for franchise and excise taxes. Those taxes were $64.5 million for October, which was $17.5 million less than the estimate for the month.

The commissioner noted that collections are below the growth rate projected by the Legislature during last spring's budget sessions.

Neel has ordered steps throughout state government to try to make up as much as $100 million by the year's end. That includes delaying equipment and automobile purchases, postponing the filling of some jobs, freezing new lease agreements and delaying the purchase of new equipment.

"We're looking at everything and trying to leave not a stone unturned," Neel said.

He said he is most concerned about the projected growth of tax collections. To balance the budget, legislative leaders arbitrarily changed the projected revenue growth rate from 4.7 percent to 5.15 percent to make it appear more revenue would come in to fund the budget.

For October, however, the sales tax growth rate was 3.81 percent. That included a one-time $4 million payment from a disputed sales tax settlement. Without that $4 million, the growth rate was only 2.77 percent.

Neel said the state needs more than a 6 percent growth rate to keep from falling short in tax collections at the fiscal year end.

"We are far below the 6 percent," Neel said. "That's why I've asked the departments to identify sources of $100 million so we could hold out until the Legislature comes back to see if any additional action needs to be taken."

Neel also said he is more convinced than ever that the state's economy is slowing down. As an example, he compared the activity of key economic sectors for two six-month periods -- from May to October and from November 1999 to April.

During the most recent period, building materials showed a decline of 5.26 percent, which Neel said reflects rising interest rates that have led to less home building. In addition, furniture and home-furnishing purchases, which are partially linked to housing starts, increased by only 4.83 percent during the most recent six months compared to 9.04 percent growth during the November to April period.

Neel stressed that the shortfall is not a revenue issue but "a compelling needs issue in the state." He said the state must make choices about funding for education, poverty, health care and other key areas.

"We've got world-class roads," he said. "I hope we have a generation of kids who can read the road signs."