Kaine announces 593 layoffs, 2 prison closings, furloughs

By Michael Sluss and Tonia Moxley

State agencies are again trimming their spending, and nearly 600 workers will lose their jobs as part of budget cuts that Gov. Timothy M. Kaine announced Tuesday.

Faced with an additional shortfall of $1.35 billion in revenue for the current fiscal year, Kaine outlined a plan that also calls for one day of unpaid leave for most state workers, a reduction in contributions to the state employee pension plan, and another withdrawal from the "rainy day" reserve fund. Two prisons - the Brunswick and Botetourt correctional centers - will also be closed.

This is the fourth time that Kaine has proposed cuts to the two-year spending plan that ends in June.

The steps Kaine outlined Tuesday will eliminate 929 positions in state government and result in 593 layoffs. Those figures don't include layoffs that could occur at state colleges.

"My heart goes out to people who lose jobs under any circumstances, especially in this job market," Kaine said in a news conference.

Kaine, who will leave office in January, proposed no tax increases to balance a cumulative revenue shortfall approaching $7 billion for the current two-year budget. The shortfall is the worst on record, said Finance Secretary Richard Brown.

Kaine also spared public elementary and secondary schools from major cuts. But virtually every state agency will be affected, whether through job losses, reductions in funding for programs or limits on training, travel and other expenses.

About $500,000 will be raised through new fees or fee increases, including a new fee for making a reservation at a state park and a $25 fee for candidates who file their campaign finance reports on paper instead of electronically.

Kaine also called for another round of cuts to the state's four-year colleges. He reduced state funding by as much as 15 percent for the colleges but said he will seek to accelerate the use of federal stimulus money to cushion the impact of those cuts.

Stimulus money that had been earmarked for use by colleges in the 2011 fiscal year could be applied in the current year to hold the budget cuts to an average of 7.7 percent, he said. Universities will be given flexibility to adjust their budgets and determine whether layoffs will be necessary.

Under Kaine's plan, Virginia Tech would lose $21.8 million in general-fund money this year. That total does not include $4.5 million in cuts to the Virginia Cooperative Extension and Virginia Agricultural Experiment Station at Tech. Nor does it include the estimated $1.2 million salary cut Tech employees will face with a mandatory furlough day next spring.

Tech spokesman Larry Hincker called the latest cut to the university's budget "the worst-case scenario."

"It's very likely there will be position eliminations and there could be layoffs," Hincker said.

It probably will be weeks before administrators know how particular departments and divisions are affected. Each will come up with its own reduction plan, Hincker said.

Accelerating the use of federal stimulus funds could reduce Tech's budget cut to about $8 million, but Hincker warned that such a move could leave the university with another major shortfall in 2011, after the stimulus money expires.

At community colleges, the cuts amount to 6.9 percent, which will translate to a $3.3 million loss at Tidewater Community College, President Deborah DiCroce said.

"It could've been worse," she said. "It's by no means good."

The cut comes on top of two previous rounds of budget reductions, each at 5 percent. She and other officials at other Hampton Roads colleges said Tuesday that they are still working on the details of their revised spending plans.

DiCroce said she's most concerned that state funding is dropping at a time when student growth is in the double digits.

Kaine's plan includes a one-day furlough for most state workers on the Friday before Memorial Day next year. He also called for suspending employer payments to the state pension system in the final quarter of this fiscal year but said the reduction won't affect retiree benefits. Kaine indicated that his budget proposal for the following two years will require employees to assume a share of retirement plan contributions, which now are fully funded by the state.

The budget plan also will eliminate 70 administrative and support jobs and 13 direct care treatment jobs at mental health institutions throughout the state.

Kaine and lawmakers revised the $77 billion budget earlier this year to account for a cumulative shortfall of $3.7 billion, but that plan projected a slight increase in tax collections for the fiscal year that began July 1. Kaine ordered more cuts after his administration determined that state revenue will decrease for a second straight year.

"The governor's announcement of immediate and proposed spending reductions is a sobering reminder of the difficulties families and businesses are facing while they cope with the worst economic crisis since the Great Depression," House Speaker Bill Howell, R-Stafford County, said in a statement.

"Just as small businesses and families are tightening their belts, trimming expenses and reprioritizing their budgets, so too must the Commonwealth take fiscally responsible actions to ensure a balanced state budget."

Roanoke Times writer Rex Bowman and Pilot writers Bill Bartel and Denise Watson Batts contributed to this report, which also contains information from The Associated Press.