Gov. Tim Kaine this morning called for $348 million in state spending cuts and withdrawing about $400 million from the state's "rainy day" reserve fund to help offset a shortfall in Virginia's two-year budget.

The governor's spending cuts would eliminate about 1,400 positions throughout state government, with more than 570 jobs eliminated through layoffs. Kaine also postponed pay raises for state employees from Nov. 25 to next July. State colleges and universities would see 5 percent to 7 percent spending reductions. The cut to Virginia Tech, in particular, would be an $8.8 million reduction, 49 positions eliminated and three layoffs.

Kaine's actions are a first step toward addressing a $2.5 billion shortfall in the state's $77 billion budget. State officials largely attribute the revenue shortage to a national economic downturn that has weakened growth in state sales and income tax collections, two major sources of revenue in Virginia's general fund.

The cuts announced today apply only to the fiscal year that ends June 30, 2009. In addition to spending cuts and use of the state's rainy day fund, Kaine plans to free $250 million by using debt rather than cash for certain state construction projects.

Kaine will outline the rest of his plan for balancing the budget in December, when he presents a revised spending plan to the General Assembly's money committees.