Kaine announces Va. spending cuts

Media General News Service
Published: August 15, 2008

RICHMOND — Gov. Timothy M. Kaine announced state spending cuts of $49 million Friday, including savings from the layoffs of 18 full-time employees.

The reductions are expected to be only a small portion of much larger cuts when the governor proposes a revised budget in December.

“I think we are going to have to make cuts significantly more than that,” said Del. Philip A. Hamilton, R-Newport News, vice chairman of the House Appropriations Committee. “This is just the start.”

The governor announced the reductions in advance of his address Monday to a joint meeting of the Senate and House Finance Committees and the House Appropriations Committee. Kaine will report the final revenue numbers for fiscal 2008 and discuss the possibility of lowering projected revenue totals for 2009 and 2010.

Tax revenues are not meeting projections because of the economic slowdown. Lawmakers in both parties say the state’s cash crunch is growing worse and could short the state budget an additional $1 billion. This year, Kaine and legislators already have pruned spending by more than $2 billion because of the darkening revenue picture.

Hamilton said some members of the budget committee cautioned earlier this year that the Kaine administration’s revenue estimates for 2009-10 were too optimistic.

The cuts include $17 million made by the governor and the General Assembly in the fiscal year ended June 30. The savings are being carried forward into the current fiscal year, which ends next June 30.

In addition, Kaine announced $17 million in cuts for this fiscal year and $15 million for fiscal 2010.

About $9 million is saved in discretionary spending, including reduced travel, training and equipment purchases. An additional $7 million of the cuts come from reducing personnel costs. These include the 18 layoffs, deferred hiring and not filling vacancies.

Delacey Skinner, director of communications for Kaine, said she understood some of the layoffs will come from people close to retirement.

The $77 billion, two-year budget that the General Assembly adopted this year required Kaine to make $35 million in spending cuts for fiscal 2009 and 2010. The governor was able to find an additional $14 million, Skinner said.