First look at Kaine’s budget cuts today

By JEFF E. SCHAPIRO TIMES-DISPATCH STAFF WRITER
Published: October 8, 2008

For Gov. Timothy M. Kaine, economy begins at home.

With Virginia facing a shortfall that could balloon by an additional $2 billion or more, Kaine today begins laying out a budget-balancing plan forced by the credit crisis, spiking fuel prices and the collapse of the housing market.

First up: spending cuts in Kaine’s personal staff, the Cabinet and the governor’s official residence, the Executive Mansion.

Tomorrow, Kaine will tell the rest of the story: potentially sweeping reductions across state government that are expected to include deeper layoffs.

Kaine recently ordered agencies to submit plans for trimming spending by 5 percent, 10 percent or 15 percent.

So far there have been only a handful of layoffs, with the state instead keeping open vacancies and clamping down on travel and use of contractors.

The administration’s disclosures will be closely followed in the Richmond area, home to many of the state’s 116,000 employees.

Delacey Skinner, the governor’s communications director, yesterday declined to comment on the forthcoming announcements.

Kaine plans to disclose in a written statement today belt-tightening for his office and those of his Cabinet secretaries, as well as economies at his taxpayer-provided, 19th-century residence on Capitol Square.

In an appearance tomorrow, Kaine will explain reductions to be carried out across the state bureaucracy—reductions he has hinted are unlikely to spare education and human services.

Meantime, there are tentative signs that Kaine has arrived at a figure on the projected cash pinch for the remaining 21 months of the two-year spending cycle.

This decline, attributed to the onset of a possible recession, is triggering the next round of cuts. Kaine and the General Assembly have incrementally pruned spending since mid-2007.

It appears, according to budget experts familiar with the administration’s calculations, that the $77 billion budget may fall short an additional $2.5 billion.

But these experts, speaking privately, cautioned that the figure could change because of the uncertain economy.

Projections prepared for Kaine last month ranged from $2 billion to $2.9 billion, atop about $2 billion that forced reductions earlier this year.

The assembly could modify cuts pushed by Kaine, a Democrat approaching his final year in office, when it returns to Richmond in January.

That could lead to a partisan struggle. The state Senate is narrowly controlled by Democrats. The House of Delegates has a Republican majority.

House Republicans, led by Speaker William J. Howell of Stafford County, expect that the revenue picture will be even bleaker, with the shortfall perhaps exceeding $3 billion.

The House GOP caucus believes that it’s “going to get worse before it gets better,“ said G. Paul Nardo, Howell’s chief of staff.

Kaine has sought to apprise lawmakers of revenue and spending developments since disclosing in August that the budget continues to bleed cash.

Last Friday, he briefed Democrats in a conference call that included a separate presentation on the political landscape by his personal pollster, Peter Brodnitz.

On Sept. 26, the governor met privately in Richmond with senior budget-writers from both political parties.
Contact Jeff E. Schapiro at (804) 649-6814 or .