"All state agencies will need to dial back their spending,"Perry said during his annual "state of the state" address beforethe Dallas Regional Chamber. Nearly 300 officials, businesspeopleand civic leaders were on hand for the luncheon at the DowntownSheraton.

"We will be taking a look at the difference between a want and aneed," the governor stressed, citing the Texas Gulf Coast as anarea of extreme need. He estimates the damage toll will top $11billion. His team is keeping "steady pressure on FEMA" to getreimbursements comparable to Louisiana after Hurricane Katrina in2005, but he added "Ike's financial impact is going to be with usfor awhile."

In terms of prospective cutbacks, Perry said there is a need for"greater truth in budgeting." He said the reality is state agenciesmust function like Texas businesses and families, both of which aretightening belts and cutting spending.