TALLAHASSEE -- Florida's legislative leaders announced Monday that they will convene an extraordinary lawmaking session Jan. 5 to close the state's ever-widening $2.3 billion budget hole.

The Republican leaders' joint announcement said legislators will focus on cutting the budget and shifting money from savings accounts and other funds. Tax and fee increases look like they're off the table.

''It is in the best financial interests of the state that we convene in a special session from January 5 through January 16,'' said House Speaker Ray Sansom of Destin and Senate President Jeff Atwater of North Palm Beach. They said they agreed to call the session after consulting with Gov. Charlie Crist.

Legislators had little choice. The state Constitution forbids deficits. And, after back-to-back years of budget cuts, the full Legislature must convene to make tough decisions about what programs get cut and when because there is far less money to go around than in previous years.

Florida's budget currently stands at $66.3 billion -- $7.4 billion less than just two years ago.

Next year, the outlook is even more bleak.

Based on forecasts of current tax collections, which have precipitously declined,state economists estimate next year's budget hole could be about $5.8 billion -- that's after this January's cuts.

The state Senate projects a smaller deficit of $3.8 billion. That suggests lawmakers are ready to make deep cuts that would likely mean the elimination of health programs such as Meds AD and the Medically Needy, which respectively serve poor seniors and the catastrophically sick.

Schools could also face a huge cut next year because property values are swiftly declining. If this year's property-tax rate were held the same, schools statewide would see their spending reduced $780 million.

''Anyone who depends on the state should be deathly afraid,'' said lobbyist Ron Book, who represents myriad governments, such as Miami-Dade, and private clients.

One of the first to sound the alarm about the need for a special session was state Chief Financial Officer Alex Sink, the only Democrat on the Cabinet. Sen. Atwater heeded the warning and established a special joint committee to analyze the state's economy and budget. But Sansom and Crist said they preferred to wait.

Crist said last week that he'll likely recommend taking money from the Lawton Chiles Endowment Fund -- even though the former governor's family threatened to sue the state if legislators deplete the annuity. The fund, established for kids' and seniors' health care, has lost almost half its $2.1 billion value in recent months as the stock market tanked.

Crist's office has also discussed whether to recommend state-worker furloughs, eliminate or combine state agencies and tap at least $300 million in special accounts called trust funds that were established for special projects and purposes.

Sink said that because of the surge in holiday retail sales, state revenue is rising slightly but it won't be enough. As the state's treasurer, she said she expects to have to borrow ''a couple hundred million'' more from trust fund accounts to balance the budget by January, on top of the $750 million already borrowed.

Sink said legislators should first comb the budget to eliminate any ''non-mission critical'' elements, then they should review all sales tax exemptions and their last resort should be to consider revenue increases, such as an increase in the cigarette tax. ''There are some really tough decisions that need to be made,'' Sink said Monday. ``Surely, by the first of the year they have got to do something. The check-book is not looking any prettier.''

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