It’s official – the state is enduring another budget shortfall.
“I directed executive agencies in July to prepare budget reduction plans at the 5, 10 and 15 percent levels so that we can make decisions promptly. I began review of these plans last month and will be prepared to announce and implement decisions in early September,” Gov. Tim Kaine told members of the money committees in the Senate and House of Delegates today in Richmond, after reporting that the state’s tax collections will be off an additional $1.2 billion in fiscal-year 2010.
Taken together with the near $300 million shortfall in revenues in 2009, the state is having to adjust its budget by $1.5 billion for the 2008-2010 biennium. “We will close this gap, just as we have in past rounds, by relying on expense reductions, reprogramming of unexpended balances, targeted withdrawal of reserve funds, focused use of federal Recovery Act funds and other reasonable strategies. We will make these decisions carefully, but they will be painful to those who rely on public services in this most challenging time,” Kaine said.
“We will follow the same principles as in early rounds of budget reductions—transparency, focus on performance and priorities, and making decisions that position us for long-term success,” Kaine said. “Many of the changes will be those I am authorized to make under the relevant sections of the budget. But, there may be additional actions where I will need to propose language in the caboose budget for your approval. I have no doubt that we can continue to work together to move Virginia forward.”
House Speaker Bill Howell took a couple of political swipes at the governor in a statement released to the press Wednesday afternoon.
“With a clearer understanding of our future revenue figures, it is now up to Gov. Kaine to use his authority given to him by the General Assembly to implement the needed spending reductions – sooner not later – to ensure that the Commonwealth adheres to its constitutional responsibility of maintaining and producing a balanced budget. The longer the Commonwealth delays not doing anything about aligning spending with incoming revenues, the harder it is to make up the difference,” Howell said. “As Virginians are painfully aware, fiscal responsibility by state leaders, business growth and job creation – not higher taxes or more spending on government programs – are the keys to a robust economic recovery. Going forward now and later this year, I hope the governor chooses the right path in addressing Virginia’s ongoing budget shortfall.”
Kaine made clear in his message to legislators that he does not intend to push for a tax increase, and it’s Republicans pushing for more spending, with the talk that 25th District Del. Steve Landes wants legislation that would reopen rest areas closed this summer as a cost-savings measure in the Virginia Department of Transportation budget.
On the other side of the political coin is Bath County State Sen. Creigh Deeds, the Democratic Party nominee for governor.
“State government must continue to tighten its belt in these tough economic times the same way many families and businesses are responding to the financial challenges that reached a boiling point in the final months of the Bush administration,” Deeds said in a statement this afternoon.
“As we adjust to these changing economic realities, Virginia must not rest on its laurels as the ‘best state for business’ and the ‘best managed state’ in the nation,” Deeds said. “That is why I have put forth a responsible and comprehensive government efficiency plan that will make sure we economize, audit every agency of state government, and aggressively identify ways to save taxpayer money by streamlining functions while maintaining citizen services and protecting our shared priorities.”
– Story by Chris Graham
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