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SACRAMENTO — Gov. Gray Davis formally called a special session of the Legislature Tuesday to deal with an expected $12.4 billion budget shortfall this year and next. 

Davis said in November that he would call an emergency legislative session to deal with $2.2 billion in proposed cuts to the current budget. Making it official Tuesday, he ordered the special proceedings to run concurrent with the regular session that began Monday. 

In his order, he said the Legislature should take up his proposed cuts, as well as economic stimulus plans and a proposal to make a newly enacted unemployment benefits increase retroactive to Sept. 11. 

Davis will release his 2002-03 budget Thursday. He is expected to propose deeper cuts to state programs to deal with the shortfall. Davis also has imposed a statewide hiring freeze. 

Analysts blame the budget shortfall on an already slumping economy, the high-tech industry collapse, the effects of the Sept. 11 attacks and billions in state spending to stem a statewide power crisis.