Texas’ prison system chief warned Thursday of a “long and difficult process” that could include staff reductions while the agency deals with financial cuts as part of an overall state budget shortfall expected to top $20 billion.

The task became more difficult this week when officials ordered all state agencies to find an additional 2.5 percent to trim from their operating budgets in the current year. Brad Livingston, executive director of the Texas Department of Criminal Justice, said that amounts to $75 million for his agency.

“All of the obvious savings have been identified,” he told the agency’s board meeting in Austin.

The prison system already cut $55 million in an earlier reduction, managing to head off what could have been a $300 million slash thanks to exceptions citing public safety concerns.

“It is possible that significant budget cuts will be made,” he added. “It would be virtually impossible to avoid significant staff reductions under significant reduction scenarios.”

The nation’s second-largest prison system, holding more than 150,000 inmates, is asking for $6.55 billion in the upcoming 2012-13 budget and already has been told to trim that by 5 percent.

Oliver Bell, chairman of the Texas Board of Criminal Justice, said he would “like to think no one’s job is in jeopardy but depending on the level we’re resourced at, a large portion of our budget is personnel expense. And we’d have to respond appropriately.”

He said the prospect of closing some of Texas’ more than 100 prisons was not being considered “at this time.”

“I do know in the past there were a couple units reviewed in previous (legislative) sessions,” he said. “That may be something the legislature chooses to revisit in the session (beginning next month). We’re not putting that forward specifically.”

Livingston said the immediate 2.5 percent request “will create substantial challenges for us.”

“We’ll continue to look at every aspect of our budget and identify those things that are least disruptive as compared to most disruptive. The deeper you go, the less likely it is that you can avoid staff reductions.”

He said he couldn’t provide a timetable on when or if that will happen.

The latest cuts, requested in a letter from Gov. Rick Perry, Lt. Gov. David Dewhurst and House Speaker Joe Straus, will be on top of about $1.2 billion in spending cuts already made this year in Texas. The legislature will make the cuts in a supplemental budget, which is used to handle unexpected savings or expenses, when it convenes in January, the letter said.

The shortfall is the gap between revenue and the amount of money needed to maintain state services at current levels, and its exact amount won’t be known until the comptroller releases her estimates in January.

State tax receipts have been down because of the recession, and Texas also must fill a hole of about $11 billion left by federal stimulus money and other state savings that helped last year but are no longer available. Added costs from increased enrollment in public schools and health care programs, increases in health care costs and lower property values have added to the hole.

State revenue fell short of projections by $2 billion in the fiscal year that ended in August and probably won’t meet projections for this year either.

“It’s a challenging time for all us, for sure,” Livingston said. “The message we’ve continued to try to put out for our staff is to continue focusing on fulfilling the mission of this agency and handling their responsibilities on the front lines.”