RICHMOND
Confronted by a weakening state economy, Virginia officials are bracing for drastic government spending cuts in the current two-year state budget that could approach $3 billion.
The "sobering" projections came during a meeting with a panel of economic advisers and key state legislators Tuesday, Gov. Timothy M. Kaine said.
A shortfall in revenue from sales taxes and business and individual income tax collections necessitates the cuts to balance the state budget, he said. State law prohibits an unbalanced budget.
State officials said they have not determined what will be cut from the $77 billion, two-year budget, but Kaine warned that "nothing is off-limits."
The governor had already made cuts in the previous two-year budget period, which ended in June, and avoided cuts to education funding and sought to soften the blow to law enforcement agencies and local governments.
Now, however, "Everything's up for analysis," he said.
Kaine, who had advised state agency leaders to propose ways to cuts expenses, expects the coming cuts will be more painful than earlier reductions.
"We didn't have a lot of controversy with the first two rounds," he said of the roughly $1.7 billion cleaved out of the previous two-year budget cycle.
"It's going to be very difficult to do these cuts and have it just be kind of opaque to people. They will be seen and felt."
Those at Tuesday's meeting were presented with two economic scenarios: best-case and worst-case.
If revenue remains in the best-case range, officials could get by with $2 billion in cuts. The larger figure, about $2.9 billion, would become the target if revenue collections continue to decline.
Virginia's general fund budget, which is supported with tax revenue, is about $34 billion for the current two-year cycle, meaning that in the worst-case scenario slightly less than 10 percent of that money would be lost.
In early September, Kaine ordered all agencies to submit plans for cuts of 5, 10 and 15 percent. He said he would ask his economic advisers to analyze trends in the state economy before announcing a specific plan next month to tighten spending.
"It's obviously a huge challenge," the governor said Tuesday about finding the cuts while preserving core government services.
A clearer picture should be available next month, when state officials will have firm tax collection figures from the first quarter of the current fiscal year, which began July 1.
When the General Assembly returns in January, legislators will take their turn proposing cuts.
Republicans, who had previously accused the governor of budgeting based on overly optimistic projections of revenue, said Tuesday that the looming cuts are an indication that the spending plan has become unnecessarily bloated.
"The slowdown in the economy provides us an opportunity to go in and look at the structure of our Virginia budget," said Del. Phillip Hamilton, R-Newport News. He said that he sees excess in many aspects of government spending.
House Minority Leader Morgan Griffith, R-Salem, said Kaine has reacted too slowly to a problem that he has the authority to correct. "In this state, the governor's the person with the power of the red pen," he said.
Like the rest of the nation, Virginia is suffering through tough economic times.
And while the slowdown hasn't been as pronounced in Virginia as it has been elsewhere, Kaine said that is "pretty cold comfort" for officials who have to make tough choices about where to make cuts and for those Virginians affected by those cuts.
Staff writer Warren Fiske contributed to this report.
Julian Walker, (804) 697-1564, julian.walker@pilotonline.com
Delicious
Digg
Reddit
Facebook
Google
Yahoo
Yikes!
Let's see, $700 bil bailout, and in Virginia we have a shortfall as well. According to the article, things will be cut..will I lose my job? Where are the cuts going to be? The bad thing about the bailout and Virginia's shortfall, is that taxpayers will be paying the price..gee thanks! Stop the madness! Stop the world, I wanna get off! Blame whomever you want, it's still going to be one big mess with my great, great grandchildren footing the bill.
Fault - Who Cares!
We as a country have to stop pointing fingers and placing blame. Use your words to spread information, not hate and blame. Party mantra is a bunch of bull. We have a problem. OK, now let's work to fix it. The Governor, regardless of which party s/he is from, is still the Governor. Don't like it, vote against them when your able. Until then, we are "governed" by our elected officials. To complain without offering to help is useless. If you/we have an idea, pass them on to appropriate agency, gather support and make you voice heard. Positive people needed. Negative defeatists just stay home. If all the democrat supporting military members quit because of a republican president (or vice a versa), we would lose in every endeavor. We express our opinions, vote our choice and accept the consequences. We must work together and stop the negativity.
Gertz Explain to me
Tell me how Virginia beening short 2 Billion is Bush's fault.. I guess the fact you are he is his fault too...
Ahhh bush bashing w/o reason
Instead of looking at Bush as the reason why jobs are going overseas you should actually look at facts.
We've been told time and again by Repubs and Dems alike that we need to break our addiction to oil. Well, with the gas price increases the market (read people) have done exactly that, we've been driving less. And instead of the Dems and Repubs being happy that we are doing this now they tell us that there is less money coming in for road programs and now they have to raise our gas taxes. What a nice gift for doing something good for the environment.
And this is exactly the point that Tabor is making. Because people and businesses are being taxed so much there is very little margin left to make businesses profitable and less money in our pockets to do with what we want. Just look at the VB city council when they talked about lowering the tax rates. One of them had the nerve to say that they had to leave "something in our pockets to buy some things".
They see our pockets as the never end well of which to tap... thank everyone in office since Carter, not just Bush
we can thank Bush
"This is what is driving our jobs overseas and destroying our economy."
We can blame Bush for that one.
Read my lips, new taxes now mean less revenue
WR, of course government workers must be paid fairly, but we must rely on economic growth for that. We have reached the point where the share of the GNP taken by government at all levels has reached the point that further increases in tax rates slow the economy so much that there is less commerce to tax and thus less tax revenue.
The only places with tax rates higher than ours are socialist countries where goods and services, like health care and television programming, are provided by government, while we get those from the private sector. Part of their "tax burden" is really the price of those things we buy separately here. No place else has as high a burden for actual government services as we do.
This is what is driving our jobs overseas and destroying our economy. So we cannot tax our way out of this, paradoxically, we must reduce our tax burden if we are to be able to afford to pay for government.
"Read my lips: no new taxes"
is a now-famous phrase spoken by former American president and candidate George H. W. Bush at the 1988 Republican National Convention.
If you think you need a pay raise to adjust your salary for inflation to offset the cost of living, then should not teachers, highway workers, EMT, fire, police be afforded the same? What about Medicare? You know those old people on fixed incomes.
And how are these fine folks paid? Through taxes! Didn't then President George W. H. Bush RAISE taxes?
With no new taxes or tax increases to adjust for inflation...what services are you willing not to complain about?
Regardless of party affiliation (Republican, Democrat, if there is ever a viable third party) how do you expect to pay for the "common good"?
Typical democrat
Warner lies about raising taxes, and gives us the largest tax increase in history. Now we feal the pain wiht kaine. Why vote democrat?
budget waste
I work for the department of corrections. Here are ways to save money. The staff houses at southampton correctional center were never sold when gov. warner ordered them sold. people still live in them and have a small amount of money deducted from their check for rent. sell them to someone that will have to pay taxes on them. wardens, assistant wardens and others get a housing allowance each payday if there is not a state owned house near their prison. you know, the houses that were supposed to be sold. they get $225.00 x 24 payday. there are at least 50 prisons and maybe more. do the math, it is over a half a millon dollars a year that the state could save. it is also tax free. i am sure that the people in the regional offices and headquarters get this too. a duty officer at a prison can drive a state vehicle to commute from home in during their week of duty and do not have to pay for the use of it or the gas. this is an untaxed freebe. cut that out. state agencies cannot carry over any saved money from one fiscal year to the next. they have to turn it back in and if they do, their budget is cut for the next year because it is thought that they do not need it.
cuts will happen
Governor Kaine said he would look at the budget after the quarter ends Sept. 30, and will go from there on what needs to be done. There isn't anything else he can do, and there is nothing wrong with what he is doing.
I don't think people understand. When people stop spending there is less tax income to support the budget, therefore adjustments have to be made. Life really isn't all that complicated.
Huge Savings on Education Costs and increased revenue
I think Governor Kaine should change public school education financing to a sliding scale so that only income eligible children get a free education. The money should follow the child. (This will have the immediate benefit of making "public school" more efficient and effective while flattening their administrative structure as private institutions already do.
They should provide the same portability features for pre-school and developmental education.
He should on a sliding scale provide Metro access for urban children as neighborhood elementary schools are within walking distance and middle schoolers are old enough to ride the bus by themselves.
He could also approve Natural Gas drilling off the coast of which we would get 37.5% revenue share up to an inflation adjusted 500 million. Once that revenue is on line we should apply that money to school choice and transportation.
chris 33
how ill are you,do you work for move on.org?your words are so out of tougch with facts,and ride on emotion only,obama is a fruad, in 2000 bush,pushed for independent oversight,and was rejected by congress,meanwhile people like obama,hillary,biden,dodd,etc etc.got large amounts of incentives from fanny,and freddie.so tell me chris,name one piece of legislation did obama ever puash pash or present to congress for the good of the nation.on i'll wait amasing how in two years he took 109,000 dollars from dontation from freddie and fannie,unfortunatly i will vote for mCcain bcause it sure beats the alt.
The preceding
was from Va's own website which list the accomplishments that got the state with a budget shortfall, don't believe the hype that revenue's weren't enough, he just added more to it. http://www.governor.virginia.gov/Initiatives/Legislation2008/#consumerProtections
And the list goes on, here's just a few of his accomplishments:
$1.1 Billion Increase for K-12, The final budget invests $22.1 million each year for institutions of higher education , $33.8 million to continue the investment in research, and $18.2 million over the biennium for financial aid to help offset tuition and fee charges. $30 million bond package for open space preservation and parks, $9 million in the new two-year budget for various land conservation programs, $44 million to improve the Commonwealth’s child welfare system, $22 million expansion of Pre-K not enough space to list all. And he wonders why we have to cut?
no attack
Your statements are completely untrue. Mine can be proven. Your's are just words . Within these boards, as well as using national news sources, you could easily read for yourself the majority of your assertions are false and are nothing more than a partisan attack. McCain did in fact attempt pass legislation to prevent this. The prior legislation helped banking a great deal. It did not invite people to make bad choices or deceive others. In fact, the entire premise of that argument screams that your position is not democratic but socialist. Your man is a fraud. Your overzealousness does not forgive this fact.
Personal attacks not working.
The only thing fictional are the BS personal attacks on Obama. Guess what? It's not working anymore. The American people are smarter than that. McCain's economic advisor Phil Gramm created the economic disaster when he deregulated Wall Street on Dec. 15, 2000, and George Bush wasted 4,000 American lives and $700 billion dollars in Iraq. Those are the things that matter.
Well
"Why would we want to elect a man who voted with George Bush 90% of the time?"
Because the alternative is basically a fictional character.
Why???
Rising unemployment, rising gas prices, record foreclosures, record trade deficit, the Big Three on the verge of bankrupcy, $700 billion dollars wasted on Iraq, a $500 billion dollar budget deficit, and a stock market crash. Why would we want to elect a man who voted with George Bush 90% of the time?
With...
With state government accounting methods, why is this news? To make it simple, Warner convinced the state that we needed the largest tax increase in history to "cover" shortfalls in the budget. Shortly after it was passed and due to economic recovery, the tax increase became a surplus which means it was never needed in the first place. However, Warner and Co allocated that money to new intiatives and boosted funding to existing ones which made the new expenditures a committment for future budgets. With bloated expectations of continued growth, even MORE money was committed to boondoggles and Timmie even wanted more for lame transportation projects. Guess where the new transportation funds would be going now?
Hey Tim! Use the Warner solution.
Warner did nothing for me but raise my taxes. Kaine will raise taxes. Wait and see. Voters have two real choices. The way I see it, if you have too much money an want more to go to the government, vote for a Democrat party candidate. If you want to keep more of your money, vote Republican.
Governor, Delegates, Senators
First step is an across the board cut. Next step is to cut the fluff. Finally, you examine the State Constitution and any department/service which is not in there...kill it. Do not increase fees/taxes, surcharges.
Then realize that each of you and those whom preceeded you, had a hand in this mess.
hey chunky monkey
thats just it too much gvt. programs doyeeee!our politicans need to learn,the basic fundimentals.don't write checks that you don't have money to back,so where did the"surplus" go? probably to pay more govt entitlements to the poor,yea the poor,the true bankruptors of our country,they bankrupted, welfare,social security,food stamps,medicaid,govt housing.special inner city after school program,and the list goes on.social services,meals on wheels,section eight housing,continous bankruptcy claims,who do you think pays for this,working people,oh yea screwed up thing is the poor don't even pay into the system,they loot it in the form of earned income tax credit.another way of redistribution of wealth.give me a break! chunky
NEWSFLASH
NEWSFLASH: BUDGET CUTS NEEDED! Thank goodness these geniuses in our government are at the forefront of events, always a step ahead! Budget Cuts! OMG Who could have ever imagined that we should cut spending? Well, as long as we don't cut the entitlements or other programs that enable people to avoid the consequences of their actions or inactions. Oh and let's not cut spending to handouts either. Those expenditures are clearly absolutely necessary. Let's cut it where we don't really need it: Transportation, Security, that sort of thing.
Kaine = Higher taxes
2 BILLION dollars??? How in the world did that happen, especially after Warner broke his pre-election pledge and raised taxes when he said he wasn't going to? Hmmmm? When are people going to finally learn that when you elect Democrats, all you're doing is asking for BIGGER GOV'T and HIGHER TAXES. You watch, just like "I will not raise taxes Warner", Kaine will RAISE TAXES to cover the shortfall. That I will guarantee you! It's in their DNA. They can't help it, that's just how they roll.
Blame?
So I guess we should blame Kaine and Mark Warner (last governor and soon-to-be US Senator) for the state economy's problems. Oh, that's right, Mark Warner led a budget surplus when he was Va's governor, LOL! I mean, after all, Bush and McCain are to blame for the all of the US economy woes right? Just pointing out the media hypocrisy.
2 billion? Pretty soon we're gonna be talking about real money
So people are saying the issue with the economy is falling house prices. It's not. The issue was the rapid increase in house prices. No one is willing to admit it. The "fix" is the reversion of the property prices to where the salaries (and worker worth) justify the costs. This is going to wipe out trillions in supposed value, much of which was spent. This is going to create huge budget shortfalls within the gov't. They grew to absorb all of the extra income from the mania. Now it's time to shrink. End of story. This is the issue, this is what is going to happen. The stuff on the news is just the gov't bailing out the already rich who got us in this mess. It has nothing to do with the proles.
ITS TIME
IT TIME to tighten your belts looks like it will be a tight christmass this year..Of course one could max out all their credit cards apply for new ones max them out then lay off your mortgage payments for a few months maybe by then all you would have to do is fill out some paper work and uncle sam could step in and help bail you out :/
TIME TO SUCK IT UP
It's time for those who get their information from the Hannity and Rush comedy hour to stop pointing the political finger and suck it up. I love calling Virginia my home, and although I do not necessarily enjoy facing such a shortfall, I will do my part to help my state get through this. Whining is allowed in the other 49 states, too! If you don't like this one call me, I'll come help you move.
I wonder???
What ever happened to the "rainy day fund"? Just another Demo gimmick like the Gore "lockbox.
Budget Shortfall
I good beginning would be to cut the salaries of everyone involved - that would at least bring us into the black - because obviously someone isn't doing their job -