Wednesday, December 17, 2008
Kaine's budget plan is divulged
The proposal, which will be officially delivered today, affects Medicaid, schools and jobs.
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roanoke.com/politics
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Previous budget coverage
RICHMOND -- Gov. Tim Kaine will propose doubling Virginia's cigarette tax, cutting funds for public education and health care programs and eliminating more government jobs to help offset a $2.9 billion shortfall in the state budget, according to legislators who were briefed on the governor's plan Tuesday.
The budget plan also calls for more cuts to state colleges, shrinking a tax credit program for land conservation and giving corrections officials discretion to accelerate the release of nonviolent offenders. Kaine also wants to use nearly $500 million from the state's "rainy day" reserve fund to help balance the books, lawmakers said.
Kaine will face the General Assembly's key money committees this morning to deliver his plan for balancing the two-year budget that expires June 30, 2010. An economic recession already has forced him to make cuts to the $77 billion budget that was passed earlier this year. But administration officials have warned for months that more severe measures would be needed to balance the spending plan.
The governor's cuts call for the elimination of 1,500 jobs, including 570 layoffs that Kaine announced in October. The additional job losses will include 530 layoffs and 400 positions left vacant. Pay raises for state employees and teachers that were postponed in October will be eliminated, legislators said.
The cuts Kaine proposes today will affect public schools and Medicaid, two programs that were largely untouched in earlier rounds of budget reductions. Kaine will propose cutting about $400 million from public schools, with most of the money coming from administrative areas and the remainder from school construction, according to three legislators who were briefed on the plan during a Tuesday conference call with the governor.
The legislators asked not to be identified because Kaine won't make his budget plan public until today. Kaine spokesman Gordon Hickey declined to comment Tuesday.
Kaine will propose cutting about $400 million in state funding for the Medicaid program, lawmakers said. But the cuts will not take current recipients off the Medicaid rolls, legislators cautioned.
In an effort to cushion the blow to health care funding, Kaine will propose a 30 cents per-pack increase in the state's cigarette tax to generate $155 million for Medicaid, legislators said. Lawmakers last approved an increase in the cigarette tax in 2004, and Kaine will have a tough time winning support for his proposal.
Virginia House Speaker Bill Howell, R-Stafford County, and U.S. Rep. Eric Cantor, R-Henrico County, criticized the proposal Tuesday, saying it will jeopardize jobs in the state. Tobacco giant Philip Morris USA has corporate headquarters and major operations in the Richmond area.
"We're just going to decimate some of these jobs," Howell said.
House Minority Leader Ward Armstrong, D-Henry County, said Tuesday that he generally opposes tax increases during economic downturns but wants to "hear what the governor proposes specifically."
In response to Republican criticism, Armstrong said, "Can't we at least wait a day or two to allow [Kaine's] proposals to be considered before we start jumping up and down?"
Lawmakers said Kaine's plan also would give the Department of Corrections discretion to release certain nonviolent offenders as long as 90 days before their scheduled release dates to create additional jail capacity. The department now has the discretion to grant releases as long as 30 days ahead of schedule, legislators said.
Kaine will call for additional cuts to state colleges, which have been hit hard in the budget crisis. But the governor will ask lawmakers to dedicate an additional $25 million to student financial aid to help cushion the impact of tuition increases.





