PROVIDENCE, R.I. (WPRI) – Rhode Island’s financial outlook continues to be challenging.

In a letter sent to state agencies last week, state budget officer Tom Mullaney said the state is facing a deficit of $158 million in its 2019-20 budget year, which starts July 1 of next year. That figure represents the gap between projected general revenue and what it would cost to continue offering the current level of state services.

The estimate means whoever is serving as Rhode Island’s governor in January – either Democratic incumbent Gina Raimondo or one of those challenging her in the November election – will face difficult tax-and-spending choices almost immediately upon taking office. The new governor will need to deliver a budget plan to the General Assembly within weeks of his or her swearing-in.

As is customary, Raimondo has directed state agencies to put forward options that would shrink their budgets in order to address the deficit. This year, she is asking for proposals to achieve a 5% cut.

Agencies “should prioritize programs to eliminate duplicative and underperforming programs; streamline and consolidate programs, offices and services; and reduce layers of management and administration,” Mullaney wrote.

Budget deficits are nothing new in Rhode Island: the state has suffered from perennial gaps between revenue and spending for more than a decade, as the cost of key budget categories like Medicaid and school funding continue to rise faster than tax revenue. It’s also possible the size of the projected gap will grow or shrink over the coming months.

The current 2018-19 state budget, enacted by lawmakers in June, totals $9.6 billion. Roughly one-third of the money is federal funding.

Ted Nesi (tnesi@wpri.com) covers politics and the economy for WPRI.com. He is a weekly panelist on Newsmakers and hosts Executive Suite. Follow him on Twitter and Facebook