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Plummeting sales-tax revenues could leave Metro Transit with a $100 million funding gap and potentially "catastrophic" cutbacks in bus service next year, the agency warned Tuesday.

Unless the Legislature agrees to authorize a local option motor-vehicle excise tax, King County officials said, the free-fall in retail sales will likely translate into a 20 percent cut in bus service.

The amount of lost money is equivalent to what it takes to provide daily bus service for 75,000 passengers a day, Metro reported Tuesday. King County Executive Ron Sims said that would potentially mean reducing service to early 1990s levels.

"It's huge. It's a body blow. It's nothing we ever conceived of," Metro Transit General Manager Kevin Desmond said moments before he briefed the Metropolitan King County Council on the implications of the bus agency's tumbling revenues.

Two-thirds of Metro's income comes from sales tax.

After county officials decided to raise fares in three 25-cent increments between last March and next January, Desmond said he didn't know if fares could be raised again without driving away riders.

Ridership has increased by 20 percent over the past three years.

County Budget Director Bob Cowan said human services also will be hurt by the bad revenue news.

Revenues from the recently adopted Mental Illness and Drug Dependency sales tax are now projected to fall $3.3 million below the earlier 2009 estimate of $48.4 million and $4.4 million below the earlier 2010 estimate of $50.8 million.

Cowan will brief the County Council next month on the general fund. "It's down," he said. "The question is: Is it going to be down 3 percent, 5 percent, 8 percent, 9 percent? Things are bad."

The $670 million general fund pays for many services, from elections to animal control and courts to jails.

Desmond said Metro may be able to solve a new 2008-09 shortfall of $28.9 million by drawing down reserves, and possibly with help from the economic-stimulus package signed Tuesday by President Obama.

But even if the stimulus money can be used for operating expenses - which wasn't certain Wednesday - Desmond said it would provide "very limited" support, and said next year's $100 million problem would be "impossible to cover."

The budget office now forecasts sales-tax revenues for 2010 will fall $100 million below the $522 million projected in the 2008-09 financial plan.

Receipts for 2011 are expected to drop $123.6 million below the earlier target of $551.5 million.

"People are riding the bus in record numbers, yet the very service they want and need is jeopardized by the continued drop in sales taxes," Sims said in a written statement. "We've already cut costs by $80 million in capital, and operating costs by more than $2 million, in order to keep service on the roads this year."

The prospect of cutbacks is galling to Sims and other supporters of Transit Now, a sales-tax increase that voters approved in 2006 to expand bus service. Next year's funding gap is about twice what Transit Now brings in.

The grim financial news follows a report to the Legislature last week from the state Economic and Revenue Forecast Council that said preliminary sales-tax numbers for January were down from a year ago for retail sectors except food and beverage stores: down 30 percent for furniture and home furnishings, 26.8 percent for car dealers and 19.9 percent for gas stations and convenience stores.

Food and beverage sales were up 9.5 percent.

The forecast council also said that real-estate tax receipts - based on the number and value of property sales - were down 49 percent from January 2008.

Keith Ervin: 206-464-2105 or kervin@seattletimes.com