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

"We will be taking a look at the difference between a want and a need," the governor stressed, citing the Texas Gulf Coast as an area of extreme need. He estimates the damage toll will top $11 billion. His team is keeping "steady pressure on FEMA" to get reimbursements comparable to Louisiana after Hurricane Katrina in 2005, but he added "Ike's financial impact is going to be with us for awhile."

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