RICHMOND
Virginia may be on the brink of major budget cuts, including reductions in education and transportation spending, Gov. Timothy M. Kaine warned Monday.
In a speech to the General Assembly’s money committees, Kaine announced that he had ordered a new forecast of the state’s revenues to determine the size of an expected budget shortfall he blamed on the lagging national economy.
The governor said his financial advisers should complete the reassessment in early October, enabling him to create a specific plan to curb spending.
Kaine repeatedly declined to estimate the scope of cuts that might be needed to balance the state’s two-year, $77 billion budget that went into effect July 1. Legislators and budget analysts speculate the shortfall will exceed $1 billion.
“We will continue to do all we can to protect core services, but the need for tough decisions will require examination of all areas of state spending,” Kaine said.
Kaine did not elaborate on what type of transportation or education funding might be cut.
The governor, a Democrat, ruled out a tax increase to solve the current problems. He unsuccessfully proposed raising levies in the spring to improve transportation.
Virginia’s economic problems are by no means unique. A spring survey by the National Conference of State Legislatures found 31 states had to close budget gaps for the fiscal year that ended June 30.
“Virginia is doing slightly better than the national economy, but it’s caught in the downdraft,” said John L. Knapp, a senior economist at the Weldon Cooper Center for Public Service at the University of Virginia.
Sales taxes and individual income taxes provide for 72 percent of the state’s general fund, which supports education, health programs and public safety.
Since March, however, revenues from state income tax withholdings on paychecks have grown only 1.6 percent from the same period in 2007 and sales tax proceeds have expanded by 0.8 percent. That indicates that wages and consumer spending are lagging.
The trend is ominous for the current state budget, which is based on assumptions that receipts from individual income taxes will grow by about 5 percent and sales tax proceeds will increase by about 4 percent.
In addition, troubles in the real estate market have caused a precipitous drop in revenues from a state tax on recording deeds.
Steep gasoline prices are adding to the problem. With people driving less, Kaine said, he anticipates a drop in revenues from Virginia’s 17.5-cent-a-gallon gasoline tax, which is earmarked for transportation. Virginians also are buying fewer vehicles and switching to smaller, less-expensive models, reducing proceeds from the tax on their sales.
The prospects of new cuts to road building come on top of a $1.1 billion reduction made earlier this year by the Commonwealth Transportation Board.
After completing his 20-minute speech, Kaine was criticized by Republicans for not providing exact figures for the shortfall.
“We need a number to start making decisions,” said House Majority Leader Morgan Griffith, R-Salem. “Every week that goes by you don’t make budget cuts, the cuts that are needed are going to grow deeper.”
Republicans also noted that they had complained this winter that Kaine based his budget on rosy economic assumptions.
Kaine, in a subsequent interview, dismissed the criticisms, arguing that his projections have been historically reliable and that other states are encountering problems similar to Virginia’s.
Kaine declined to say whether he would be hampered in solving the state’s economic woes should he be selected to run for vice president with Illinois Sen. Barack Obama, the presumptive Democratic presidential nominee. Kaine is reportedly on a short list of candidates to be Obama’s running mate.
Warren Fiske, (804) 697-1565, warren.fiske@pilotonline.com
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Thanks for the Voice of Reason Ira!
Your post was a welcomed breath of fresh air. I can completely understand having second thoughts about both nominees. I tried to do my part by voting in the primary, but my candidate didn't win. Therefore, I am trying to be a good team player and support the nominee of the party that I have identified with (for reasons that I can enumerate) for more than 30 years. Your explanation for how you feel is reassuring. I could get on board with that sort of calm reasoning.
wayne
I agree with nearly everything you said. The attacks on the Clinton's and Kerry were disgusting. Republicans invented this uber partisanship climate. I sit here everyday expecting bad news and I predicted it when having discussions with friends about the possibility of Bush being elected. However, Obama is not the solution. It appears to be nothing more than backlash. I hope more people ask pointed questins and dig deep. Very deep.
Swift Boating Can Go Both Ways!
You talk about attacking someone just because he is not on "my team." What about the shameless way that Bush and Rove and their Nixonian tactics swiftboated Senator Kerry in 2004? Repbulicans do NOT own patriotism, spirituality or virtue. As a Democrat I had to listen to the whining of the right when Bill Clinton was President. I had to suffer through the stolen elections of 2000 and 2004. I resent being characterized as a weak liberal who can't be patriotic, because I don't go to the same churches or spout the same overly simplistic fixes to very serious problems. I refuse to give this country to the unimaginative who are buying their President like some box of soap. Read any of the books by Theodore White "The Making of the President." The Republicans have mastered the marketing of their packages, but they keep giving us inferior products.
wayne
I think approaching this as a us vs. them partisan thing is a fallacy. I believe it got us into the mess we are in. For example, you are attacking a decorated veteran who was a POW for no other reason than he is not on your 'team.' That bothers me.
As for Gertz assertion that no one who supports McCain complained about Bush, he obviously hasn't made it to my dinner table. As I have stated before, I dislike BO and Bush for the same reasons. They are both full of it. As for McCain, I believe he learned his lesson in 2000. You gotta play ball to get the nomination. Anyone who was watching would have been ok w/ McCain of 2000. I think he still exists.
Name One Issue That GOP Has Any Credibility With
Alright now. Don't burn too many brain cells on this one. I was sitting here reading all of the negative comments (irrational fear) about Democrats and I was wondering if I could think of any single issue with which the GOP has any credibility. I can't. Now that I have opened Pandora's proverbial box with this challenge, I will no doubt hear from righties that the GOP has stood for x, y or z, but you know, I don't think that there is a single issue that can't be shot down like John McCain's plane (oh that's right he flew into a telephone wire for one of his two crashes).
good grief
I am so glad there is less than 3 months before this elction is over. Coming from both directions D's and R's, the comments are amazing. What I keep hearing is how high your taxes will be if Obqama is elected. Honestly, some of you need to get over it. Obama isn't going to give away the country. Bush has already done it! I don't hear you complaining about that.
Gertz and Craig
Gertz, the person from NC fails to mention that Gov. Easly is a dem. While I would have voted for Kaine during the election I certainley will not back Easly.
Craig, by reading your posts nothing else can be infered other than you support Obama. Thus, you support social programs. You will in fact be supporting more people w/ your tax load. All the while he is promising a tax reduction. How does that work exactly?
For Obama's pros and cons you have to look at his background and realize some obvious outcomes that will result if he is elected. The man actually coached other people on how to receive a larger share of aid. When leaving for law school he told people he would get more done on the other side of the desk.
Replies to Ira and Mary
I support neither of the top 2 candidates.
The government has no constitutional right to take a portion of my pay to support another person, send it overseas as foreign aid, etc. It's not theirs to give.
LOL
Heck, a bunch of democrat actors stated they would leave the country if Bush was re-elected! Too bad they were just big mouth blowhards and didn't leave.
I don't believe it
I don't believe that anyone would move 500 miles away because we have a Democratic Governor. If you don't like Kaine, then work to get the office filled by the candidate of your choice instead of running away. Just a thought!
and another reason
Reason 17 why we moved 500 miles from Hampton Roads... Gov. Kaine
Hey wait....
A slowing economy is all Kaines fault!!!! For those that bash Gilmore for short term budget downsizing that ultimately led to the biggest tax increase in Virginias history, I am assuming that you will in good conscience blame Kaine for budget shortfalls now. Right? Right? Oh, no, it will still be republicans that did it some how. Kaine is a chicken hawk dunce that thought he could ride on the back of Taxemagain Warner with another bafooning of Virgina citizens. The man needs the boot and botox now!!
The only place he spends
The only place he spends money on transportation is in Northern VA, so what do I care if he cuts it??
So predictable, just like a good tax-and-spend liberal
The sky is falling, the sky is falling! Yeah, I'm sure it must seem that way in your narrow mind Mr. Kaine, but those of us that wrote to our legislators, to our Governor, and to any one else we could think of, asked, begged, and implored you to cut spending before this year's budget was approved. Your solution: MORE TAXES.
Imagine that! We are taxed so heavily at the local, state, and federal level that we work nearly 40% of our time just to pay the government. That is simply wrong. Now, hopefully, you and the rest of the idiots in Richmond will do what you should have done in the first place, control costs...........
There's a novel concept for government. Oh yes, don't try to scare us with the "education" and "transportation" as the targets of funding cuts because it won't work. Cut all the money from the schools as far as I'm concerned (schools are about useless with SOLs and "no child left behind" b
Hey GOP, Remember Fiscal Responsibility?
There was a time when Republicans used to at least pay lip service to being fiscally responsible. Remember their contract with America? Republicans Screamed for a constitutional amendment to balance the budget. They haven't done that in about eight years. The Bush-Cheney legacy will be without merit. Now the same wholesome, self-styled do-gooders are angry that Gov. Kaine is doing the responsible thing. How do you spell hypocrite? R-E-P-U-B-L-I-C-A-N!
Not Enough
Is there ever enough Gov. Kaine?
Craig!
And then if we define "conservative" as "conserving or preserving the status quo," those of us who think things are going pretty well the way they are will be the only folks writing comments on this website??? Cheers, MGM, not willing to give up the rose-colored glasses about my country or my state just yet
Craig
"It is way past the time this country ceases the belief that we're entitled to much of what the government claims it "gives us". Slam on the brakes and come to a screeching halt - all parties."
Yet you support a candidate that has helped coach people in public housing on how to get more MORE money from the goverment? A small bit of this was offered this morning at:
http://www.cnn.com/2008/POLITICS/08/18/revealed.obama.chicago/index.html
Smart and stupid things
Smart–communicate your feelings to your City Council, Delegate, State Senator, U.S. Rep and Senator regularly. Do you have their numbers?
Stupid–merely post a comment in the Va Pilot or write letter to the editor.
Smart-attend community meetings. Get involved in community activities.
Stupid-watch American Idol, Dancing with the Stars…on the 30+ inch portal to paradise & post your comments online.
Smart–vote and get involved.
Stupid–don’t vote or get involved. Get under the assumption that everyone thinks just like you do…but hey, you can always get on a blog and post your discontent.
Smart–offer a workable/valid solution to a problem facing our state/country.
Stupid-submit a politically divisive comment or letter to the editor.
enough of the D, R, BSUH tags...
It doesn't matter what party you’re affiliated with, whom you voted for/against. Whether you like/love/support or dislike/hate/want crucified any politician.
What matters is that our state and country are in trouble.
Stop pointing fingers. Offer valid points to elected officials-specifically in D.C., then in Richmond. We as a people must get the heck out of this mess the unregistered morons got us into. Vice posting on this site-when was the last time you called a state/U.S. rep? Did you vote? If not-you’re not eligible to complain.
We as a nation and a State must elect Americans vice politicians.
All I've heard over the past decades are labor pains, complaints, moans and groans...enough already! SHOW ME THE BABY ALREADY!