Education, health services in crosshairs of Kaine budget

RICHMOND

Gov. Timothy M. Kaine somberly called on the General Assembly on Wednesday night to make sharp cuts to public education, colleges and health services to balance the recession-wracked state budget.

"I don't have to tell you that we're serving in one of the most difficult times in our nation's recent history," he told lawmakers in his State of the Commonwealth Address on the opening day of the 2009 General Assembly session. "But we must be mindful that our pressures are no greater than those that our citizens are facing every day."

Kaine offered few of the assurances about the state's economic outlook that governor s traditionally bestow in the ceremonial speech. Instead, he said prosperity could hinge on the legislature's actions this winter.

"If we act with the resolve that has been summoned by the 7.5 million Virginians outside Capitol Square, there is little doubt that the future of the commonwealth is strong," he said.

"Now is the time to draw on the best of us to get through this difficult time and pave the way to a brighter tomorrow," he said. "I know we can do it."

The state faces a $2.9 billion shortfall in revenue. Unlike the federal government, Virginia is constitutionally required to balance its budget. In addition to proposing spending cuts, Kaine has asked lawmakers to double the cigarette tax to 60 cents a pack.

Despite economic duress, the governor stressed, Virginia is in better shape than most states. Thirty-eight states, including Virginia, are facing budget shortfalls, according to the National Conference of State Legislatures.

Kaine, a Democrat, did not break policy ground during his 37-minute speech. Instead, he used the occasion to justify initiatives he has rolled out over the past six weeks. He said he shunned across-the-board cuts and has proposed targeted reductions that will bring long-term efficiencies to government.

The governor has proposed $595 million in cuts to public education, largely cuts in support personnel at schools, such as clerical and maintenance workers and curriculum specialists.

"I decided that nothing in our schools was as important to the students as their teachers and principals, so I have made a proposal that protects our core priority - the classroom," Kaine said.

Concerned that proposed funding cuts of 15 percent at four-year colleges and 10 percent at two-year colleges will spur tuition increases, Kaine asked lawmakers to approve $26 million in new, need-based financial aid for students.

The governor called for cutting $418 million in Medicaid spending, in part by capping admissions to community-based nursing homes and homes for the mentally impaired. He proposed no cuts, however, to free clinics and community health care centers.

Kaine urged lawmakers to slow the growth in prisons by authorizing the release of some non violent felons 90 days before their sentences expire and reducing the number of people sent back behind bars for "technical" parole violations.

"These small changes will result in significant budget savings without compromising public safety," he said.

He issued a new call for doubling the cigarette tax, saying the proceeds would still fall short of reimbursing the state for smoking-related health costs.

The tax increase, however, appears certain to be defeated in the House of Delegates. Republican House leaders say the levy would hurt the state's ailing tobacco industry and is an insult to Philip Morris USA, the nation's largest cigarette producer and its parent company, Altria. Both corporations are based in Richmond.

Kaine also pitched a series of environmental proposals, including a tax credit of up to $8,000 for homes that use solar or wind power.

After the speech, lawmakers generally credited Kaine with laying out facts and avoiding partisan appeals on the heels of his appointment last week as chairman of the Democratic National Committee.

"There was no pie-in-the sky in that speech," said Del. Kenneth Melvin, D-Portsmouth.

Republicans, though, faulted Kaine with offering a rosy assessment of the state economy and predicted the shortfall will grow to more than $3.5 billion next month, prompting deeper spending cuts.

"I still think we have not seen the worst of this," said state Sen. Kenneth Stolle, R-

Virginia Beach. "Maybe it's not a good thing to have an optimistic chief executive."

Lt. Gov. Bill Bolling, a Republican, said Kaine's agenda is incomplete. "We heard no specific or detailed plan about how we get Virginia's economy moving again," he said.

"And we heard nothing about transportation. It's as if that issue magically disappeared."

Staff writers Julian Walker and Dave Forster contributed to this report.

Warren Fiske, (804) 697-1565, warren.fiske@pilotonline.com