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By Bob Lewis
RICHMOND
State revenue collections plunged by 6.5 percent in January, leaving lawmakers already making historic cuts to the state budget in an even deeper hole, a state report released Tuesday shows.
With a revenue shortfall of $4 billion projected over the new two-year budget and House and Senate drafts of the austere new spending blueprint due Sunday, Gov. Bob McDonnell planned a Wednesday news conference to address the situation.
January's poor receipts — after an encouraging December report — leave Virginia's government 4.7 percent behind where it was a year ago and well behind the forecast 2.7 percent fiscal year 2010 decline on which current state spending is based.
Monthly receipts from "nonwithholding" taxes paid largely on investments and by the self-employed were down nearly 23 percent last month from January 2009.
Finance Secretary Richard D. Brown, in his first monthly revenue report to McDonnell, said the weak January showing was aggravated by corporate income tax refunds that were made in January this year. Last year, those refunds were issued in February, he said.
A small bright spot in Tuesday's report was a marginal increase in taxes withheld from paychecks. The Taxation Department collected $804 million in withholding payments last month compared with $793 million in January 2009. Income tax withholding collections account for two-thirds of the state's general fund revenue.
Sales tax receipts also lagged slightly. Because of a one-month delay in recording the end-of-the-month collections, the numbers reflect the height the holiday retailing season, a 3.7 percent decline from December 2008 to December 2009.
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Uh oh.
"January's poor receipts — after an encouraging December report — leave Virginia's government 4.7 percent behind where it was a year ago and well behind the forecast 2.7 percent fiscal year 2010 decline on which current state spending is based."
This is not good at all.
The CURRENT projected budget deficits are built on those old figures.
If the deficits are bigger than expected, that's more than a $4,000,000,000.00 noose.
Where are the cuts going to be made Governor?
Guess we'll find out at the hastily called news conference tomorrow.
Mr. Wizard predicts no specifics will come out but a lot of political posturing by our leader as the commonwealth's finances continue to spiral downward.
Education Cuts
Unfortunately, when the economy is in a recession more than average number of people go to colleges and universities to earn certificates and degrees to improve their employment opportunities the Virginia General Assembly will find it too easy to slash the education budget.
Pulling a rabbit out of his ....
Let's see Bobby McD and his Nopublican henchmen in the House of Delegates pull this one off. His 26-point program for economic recovery has already fallen apart less than a month into his administration and he's accepting the federal stimulus money he said he would refuse. The Nopubs would rather have us riding down dirt roads in horses and buggies,"educate" our children in third-rate schools, and decimate our public safety agencies than do sensible things like raise the gasoline tax or increase the corporate tax rate one measly percent. And don't give me this nonsense about cutting entitlements. The entire Department of Social Services is only one percent of the budget. Let's hear some substantive answers on where we're going to find the money.
It's better than Kaine and his Kronies...
...losing $300,000,000 (three hundred million dollars)! Kaine lost the Ford assembly plant...is that where they are boarding the horses and building the buggies you mentioned? So our schools are third rate eh? Warner/Kaine left them in that condition (if you are to be believed). Hey teachers! This person thinks you are providing a "third rate" education to our children!
http://dpb.virginia.gov/budget/buddoc10/agency.cfm?agency=765
The DSS of Virginia 2010 budget
General- $386,169,535
Non-general- $1,452,386,244
Personnel cost- $113,425,416
Total- $1,951,981,195 (Nearly $2 billion)
Even if it was "only" 1% of the budget look at the total!
Really...
Kaine put Ford out of business in Norfolk? It had nothing to do with the company downsizing itself? As for our schools they are performing well considering how cheap this state is per capita in that arena. The DSS is an interesting notion though. Are you saying to go ahead and cut the whole department and all the services it provides? If so please detail how we would deal with the resulting aftermath: scores of new homeless mental health clients, more unemployment (both from state employees and from the businesses that provide the services); lower revenues due to the increase in unemploymed persons and decreased business activity-as noted above; and increase strain on hospitals for care of the now unemployed and homeless persons who now have reduced or no healthcare insurance. I could go on with even more adverse effects. It sounds nice and simple to just cut social programs but to do so will have major impacts economically and socially. If you were not suggesting cutting DSS, than ignore the above.
No, I said Kaine lost Ford...
When it comes to our regions bigger employers the governor should give them a lot of incentives to stay here. That's how Michigan got the Chevy Traverse away from the Spring Hill plant in Tennessee. The first and former Saturn plant is now almost completely idle. They only have about 600 employees working there when once there were several thousand. They are making engines and are doing some other misc parts manufacturing. It would have been better to give them huge tax breaks in order to keep that plant open and people working there paying a payroll tax to Virginia. My point about the DSS is that the person said it is "only about 1%". I think they were off a little. I would like to see the fraud/abuse cleaned up when it comes to social services not cutting or getting rid of it.
Low Revenue
Lawmakers could help the budget by donating back their salary.
That would be a great start anyway...
...I wonder if Kaine had to pay income tax to Virginia for his DNC job while he was Governor...? Good question eh?
while he was Governor...?
Did Gilmore?
Gilmore didn't squander...
...a $500,000,000 "surplus" my friend. Don't get me wrong! I would rather Kaine be the chairman of the DNC than Dean! That guy (Dean) is a hard left pitbull!