HARRISBURG — The deteriorating economy continues to drive Pennsylvania's revenue collections farther below expectations.

The state Revenue Department said Monday that Pennsylvania collected about $260 million less than expected in January. Collections through the first seven months of the fiscal year are now $13.3 billion, or $1.1 billion below estimate.

Gov. Ed Rendell says he expects a $2.3 billion shortfall by the end of the fiscal year in June.

He says he plans to erase it by cutting spending, drawing on reserves and using the federal budget aid from a spending package currently being worked on in Congress.

On Wednesday, Rendell will deliver his budget speech to a joint session of the Legislature.