Kaine addresses lawmakers on budget shortfall

Story by Chris Graham
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Everything is on the table, Gov. Tim Kaine told state legislators today as the two sides began to address a projected billion-dollar shortfall in the current biennial state budget.

“The need to engage in a third major round of budget reductions will mean, by necessity, that all programs — including those previously held harmless — and all available strategies will be on the table for review,” Kaine told a joint meeting of the Senate Finance and House Finance and House Appopriations committees this morning in Richmond.

“We will continue to do all we can to protect core services, but the need for tough decisions will require examination of all areas of state spending,” said Kaine, who indicated that the normally sacrosanct state funding for local education could be among those areas that will come under scrutiny.

It’s the second August in two years that Kaine has had to go over mid-year budget cuts due to the cooling state and national economy. The situation this year is probably the tougher of the two – as Kaine noted in his speech to legislators this morning, economists are expecting declines in real gross domestic product in the fourth quarter of 2008 and the first quarter of 2009, with a muddled employment and housing-market outlook adding to the difficulties.

“The task that lies before us will not be easy. The cuts we have made over the last year — cuts based on solid data and careful prioritization — have been tough. The next round will be more difficult. However, we have met these challenges in the past, and I know that we will work together again to do the right thing. That’s what the ‘best managed’ state does. That’s what a Triple-A state does. It’s the Virginia way,” Kaine said.

Picking up on the working together theme, Del. Steve Landes, R-Weyers Cave, suggested a line of strategies that lawmakers and the administration could work through, including re-examining capital-projects lists for projects that could be put on the backburner in the interim.

“That’s a first step. The other thing is we always get a bump in December even when there’s a downturn because of the holidays and the Christmas season,” Landes said. “I don’t think any of us think that the real-estate market is going to pick up anytime soon. It may the first quarter of the year. That’s what we’ll really be looking at – is how the home sales are, and if that starts going back up, and there’s a good chance that we can weather the storm, or at least minimize what we have to do.”

Del. Chris Saxman, R-Staunton, for his part thinks there is some light at the end of the tunnel. “Gas prices are starting to come down, and money is starting to get into people’s pockets. It’s going to take some time for people to realize that, but I think we’ve bottomed out, and there are some good signs out there that the economy is going to turn around in the third and fourth quarter of this year, which is the first and second quarter of our fiscal year,” Saxman said. “Anything can happen with respect to the economy turning around. We’re not in a recession. And if oil prices continue to trend down, we can fend off any recession from happening, and that’s good news.”