RICHMOND
Faced with the fallout from a weak economy, Gov. Timothy M. Kaine on Thursday proposed cutting $2.5 billion from the state’s two-year budget, which he said would mean pink slips for about 570 state workers.
Another 800 vacant state jobs would remain unfilled, and the rest of the state work force of about 110,000 would not get a 2 percent pay raise in November as planned.
Kaine’s plan also calls for closing several older prisons, cutting 5 percent to 7 percent of public college funding, and trimming expenses at many agencies, including those providing a range of medical, aging and mental health services.
The cuts are needed, Kaine says, because of the effects of the national economic crisis on the state’s $77 billion budget.
One glaring indicator of overall market conditions in Virginia is weaker than expected tax collections, such as sales and income tax revenues.
Because money isn’t pouring in at the projected rate, the state budget is suffering, squeezed by the same economic factors as businesses and families, Kaine said Thursday afternoon as he laid out his cost-cutting plan.
Calling the task “painful and challenging,” the governor said his package of spending reductions and money-management proposals would plug a $974 million hole in the current fiscal year.
Beyond layoffs and other cost-saving measures, Kaine would withdraw $400 million from the state rainy day fund, a reserve account used in certain conditions to balance the budget.
He would also borrow $250 million for state projects that otherwise would be paid for with cash, freeing that money for other uses.
Reacting to the plan, Republicans generally struck a moderate tone Thursday, though some questioned Kaine’s reliance on the state savings account to help fix the budget.
“The governor is doing what needs to be done,” Del. Chris Jones, R-Suffolk, said in a telephone conversation. “These are difficult times for Virginia families, and we need to tighten our belts and live within our means, too.”
Jones called back minutes later to add that using the rainy day fund should be “a last resort.”
That phrase seemed to be the GOP talking point of the day, as an earlier e-mail statement from Del. Phillip Hamilton, R-Newport News, contained identical wording.
In a written statement pledging to work with Kaine, House Speaker Bill Howell, R-Stafford, noted that scrutinizing the budget presents opportunities for “trimming bureaucracy and rooting out unessential and wasteful spending.”
Many of the decisions will have to be hammered out by Kaine and legislators during the 2009 General Assembly session.
Virginia is among many states struggling to curb spending during the economic downturn. This is the second time in recent years that Kaine has had to make cuts – he cleaved $1.7 billion from the previous two-year plan – and take money from the state piggy bank to balance the budget.
And with each round, the pain becomes more acute.
This time, Kaine said, his priorities included protecting public education and keeping college tuition costs stable and financial aid available.
The governor also tried to spare local governments that likewise have been hit hard by the soft economy, though he warned that finding the additional $1.5 billion to be carved out of the second year of the biennial budget could be more difficult.
“Everything is going to be looked at,” he cautioned, later adding that tax increases are not part of his plan.
Long-term, another victim of the revenue shortfall may be the state’s already anemic funding for transportation projects.
Details of the governor’s plan for second-year cuts should be available by December.
Julian Walker, (804) 697-1564, julian.walker@pilotonline.com
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THe Problem Jim Dillion is...
Two fold. One, instead of calculating a modest increase they went for the "best" expectations. Now, I can get a 20 thousand dollar raise at the start of the New Year when I finish my BS degree and have about 3 certifications completed. However; I'm not going to increase my spending based on a 30% raise in revenue that I've not seen yet.
Two, instead of thinking that I will base my spending on a 30% raise I am basing exepcted spending and savings off a 5% increase which would be my normal raise amount. This state however; wanted all pipe dreams to come true and overspent itself.
VA took BEST case and made it the only case. So they based all spending projections off this BEST case. Had spending been left at a level consistent with "Normal" growth rates we'd probebly be talking about a surplus now instead of a deficit.
3% cut
How hard would it be for ALL state agencies to cut their budgets by 3%? or even 5%. A 3% cut across the board would balance the budget. A 5% cut would give us a surplus. I know the government is not an efficient machine and could have a 3% cut and no one would notice. Times are tough for everyone, suck it up, tighten the belt and make due with what you get. You may have to get creative, which may not be possible for the government employees.
Balanced budgets are good
Some of you act like you've been living in a cave the past few months. The budget is out of balance because of a dramatic decline in tax revenue caused by the dramatic decline in the nation's economy. You can fault the gov for overly optimistic revenue projections if you want, but keep in mind that the projections were from economists and were developed from data that is now over a year old. Did any of you know how drastically the economy was going to tank a year ago? I doubt it. In VA, the budget must balance and that's a good thing - painful sometimes, but good. If the feds were forced to live within their means, maybe the national economy wouldn't be so messed up.
State Cuts
How much can the state save if Kaine enforces the law and cleans out Death Row. Has the pilot or anyone else determined how much state money was spent for the Governor to follow Hussin Obama around like a puppet? Is than info available to the public? What are the daily expenses the state pays for the governor to tour the sate. He was elected run the state not run through it. Are there any plans to cut the number of state senators and delegates. Don't cut the 2% raise for the hard woking state employers!!!
interesting
I hear Ireland is good this time of year.. and they arent broke... lol
Hold on one second. Required reading.
How did we get into this current economic mess which beside a potential global economic meltdown, has led to reductions in tax receipts across the country. Read this article from SEPT OF 1999 that was published by one of the most liberal rags in the nation. As you read this, keep in mind that both Bush and McCain introduced legislation in 2003 to rein in Fanny Mae and Freddy Mack and the Dems shot down both. Paste to your browser and Enjoy:
http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260&sec=&spon=&pagewanted=1
Not just this nation, the world cannot afford anymore of this entitlement mentality.
HEADS!!! STANDBY-AND WATCH YOUR MAIL
I opened and read yesterday’s mail as well as others from Tuesday.
Due to the State's budget crisis, Richmond is looking for funding.
ALL military personnel, if you had used computer based software to figure your personal income tax and filed electronically, get your old W-2s and be prepared to mail them. Apparently, electronic filing W-2’s do not display your home of record/state.
The Department of Taxation is expecting me to remit just under $2300 for 2005!!!
Total assessment come to $1800 and change plus the penalty since they could not confirm I was in a combat zone....I can show them the scars if it helps.
mistake me if I'm wrong here...
...but isn't a balanced budget part of our State's Constitution?
Times are lean for many of us. Our State Government should be no exception.
Yes-I am aware of the syntax error in the subject line.
it' only fair
After watching all the debates it is obvious that Democrats think it's fair to take money from hard working people and give it to the leeches. So why does Kaine take a salary? In my liftime I have only made out once under a Democrat. That was when Carter was President and I could get 10% intrest on a CD at the bank. LOL
Solutions?
Richmond Times is reporting there will be six correctional facilities closing (please see article for list). So......what happens to these people??? Seems like the economy is tanking and now "emergency" cuts
are being abruptly made. Revenues could easily be made with "vices" such as taxes on lottery, illegal cell
phone use (someone suggested) or how about a huge cigarette TAX. Another suggestion was raising revenue with the ferry in Jamestown. Sound like great ideas...where we aren't left wondering about the NEGATIVE impacts...like that many correctional facilities being closed! Lock those doors!!!
Venom is Reid's middle name
I checked my posts; I did not say anything about voting for Democrats. But if I have to explain to you why I am voting for Mark Warner instead of Jim Gilmore, you are not educable and I simply will not bother. Nor, of course, did I say anything about corporate welfare; I am not even sure what you mean by that phrase. If you mean that advocating that the Commonwealth fulfull its duty in regard to transportation improvements in the Commonwealth, then of course I am guilty as charged. Of course, I would never call the funding of transportation improvements corporate welfare; I would call that enlightened government policy in support of our citizens and our economy.
Wow!!
Why all the venom, people? Mike has simply stated his opinion. However, I must say I'm not surprised. This type of behaviour is quite the norm for RepubliCONS.
Budget Surplus
The much talked about Surplus from a couple of years ago was based on revenues coming in at that time. Revenue is now dropping off considerably from that point, hence no more surplus.
Why should we vote for a Democrat for President?
Because we cannot afford 4 more years of RepubliCON politics! That is why!
Because Mike said so
Why vote for Democrats? Because Lord Barrett said so - and he'll flame everyone that disagrees with his corporate welfare agenda. After all, everyone knows that all we want is the "Be like Mike", right?
Tell me again?
Please tell me again why we should vote for a Demoncratic president.
Food bill cut
Last night on the news it stated that Kaine was cutting grocery bill at the governor's mansion. So, he gets a salary AND his food purchased for him by our tax dollars? Not a bad deal. My salary has to buy my food - seems like his salary would be required to do the same.
Really now....
"Kaine's action can be compared favorably to a recent Governor who left office still denying that cuts needed to be made, and that Governor continues to this day to be haunted by knowledgable people of both parties for his failure to act responsibly." I would compare it to Warners phoney budget deficeits argument where he built a bloated budget and spent money he didn't have, like Kaine, and then forced a huge tax increase through to make up for the excess. At least, at this time, Kaine is not pushing for a tax increase but I think that is only because he is afraid that it would look bad on NObama and all democrats if he tried. Wait until after the election though.
Go Timmy Go!
The budget was very poorly written and orchestrated from the start. It was never going to work from day one. The economy was already sliding when it was written. Does the Governor expect kudos for eliminating bottled water? The honorable solution would be to forfeit all of his salary, cut the budget 5% across the board, and then resign. It is evident by his recent actions he would rather be working for Obama anyway.
3rd Attempt
Plain and simple. Va has some of the best public schools in the country. The reason this tax has been palced directly on students is thefact that schools can raise tuition. Kaine's way of hiding a tax increase. He has hit the group that deserves a break to provide for those who do not.