Saturday, August 16, 2008
Kaine asks for cuts of $32 million
The governor has warned that a slowing economy will require more tough decisions.
RICHMOND -- Gov. Tim Kaine called for $32 million in new spending cuts Friday to balance the current two-year budget, relying largely on reductions in discretionary spending and personnel costs, including the elimination of the equivalent of 18 full-time jobs.
Kaine announced the cuts three days before he delivers a detailed revenue report to the General Assembly's key money committees. Kaine's administration already has warned that a slowing economy will require more tough decisions about spending after a new revenue forecast is developed this fall.
The cuts announced Friday were required under the $77 billion spending bill that lawmakers passed earlier this year. In addition to the new spending cuts, Kaine said that $17 million in reductions made to the budget in the last fiscal year will be carried forward into the current state spending plan. The combined $49 million in cuts exceeds the target established by lawmakers, Kaine said in a prepared statement.
"When the General Assembly approved the budget, legislators left it to my office to find $17.5 million per year in spending reductions," Kaine said. "With the help of my Cabinet secretaries, we have again found ways to reduce state spending while minimizing the impact on our citizens."
Kaine ordered about $9 million in discretionary spending cuts, curtailing travel, employee training, and the purchases of equipment and supplies. He also called for a $7 million reduction in personnel costs that will come from deferred hiring, not filling vacancies and eliminating the equivalent of 18 full-time jobs that are now filled. State government has about 100,000 employees.
Another $3 million in savings will come from various "improved business practices," according to the governor's office.
Kaine will address the General Assembly's money committees Monday, giving them a detailed report on state revenues for the fiscal year that ended June 30 and a glimpse of the ongoing budget challenges the state faces.
Virginia closed the fiscal year with a modest surplus, but administration officials said last month that a slowing economy will require significant adjustments to the revenue forecast for the current two-year budget. Deeper spending cuts could occur after a new forecast is developed, administration officials have said.
Kaine and lawmakers earlier this year had to cut spending and dip into the state's "rainy day" reserve fund to balance the budget that expired in June. Lawmakers also cut $1 billion from the spending plan that Kaine proposed for the current budget cycle.
In anticipation of more problems, Kaine last month put restrictions on discretionary spending and hiring, and his administration raised the possibility of layoffs.





