Wednesday, December 09, 2009
McDonnell vows balanced budget
Bob McDonnell said he has asked Gov. Tim Kaine to cut spending to achieve that goal.
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RICHMOND -- Governor-elect Bob McDonnell and a key legislative ally warned Tuesday that they will nix any efforts by outgoing Gov. Tim Kaine to increase taxes to balance Virginia's budget, and will rely on spending cuts to close a shortfall of as much as $3.5 billion.
"He [Kaine] and I have met and I've asked him, and I think others have as well, to balance the budget through a full range of spending cuts," McDonnell said during an appearance before state newspaper reporters and editors at the annual Associated Press Day at the Capitol.
Kaine will deliver a budget proposal to lawmakers Dec. 18, about four weeks before he leaves office. Having already confronted nearly $7 billion in shortfalls since 2007, Kaine said that protecting core state services will be his priority. He has not ruled out proposing tax increases or reductions in tax breaks to help balance the budget for the two-year period that begins July 1.
McDonnell, a Republican elected last month, can propose changes to Kaine's plan after he takes office Jan. 16. McDonnell campaigned against tax increases, and will have a solid GOP majority in the House of Delegates to help him keep that pledge.
Kaine has signaled he will seek to end a tax break that retailers get for collecting and remitting sales taxes, even though lawmakers rejected the idea earlier this year. He has not ruled out another effort to increase the cigarette tax, a proposal also defeated in the 2009 legislative session.
Kaine also is considering cutting the amount of money it sends to counties, cities and towns to provide car-tax relief, an idea that a senior Republican legislator dismissed Tuesday.
"I do not see it going anywhere, and that's why I think it's counterproductive to put it in the budget," said Del. Kirk Cox, R-Colonial Heights, a senior member of the House Appropriations Committee, during a panel discussion on the budget.
Lawmakers voted in 2004 to cap spending for the program at $950 million annually. McDonnell said Tuesday that he would consider any move to reduce those payments to be a tax increase.
Kaine spokeswoman Lynda Tran said the administration is considering the car tax among "a whole host of other revenue actions" while weighing options for producing a balanced budget.
State Sen. Janet Howell, D-Fairfax County, said Kaine "needs to put forward the very best budget he can," even if it contains tax increases.
"If the new governor disagrees, he can make some cuts," said Howell, a member of the Senate Finance Committee, who joined Cox in the panel discussion.
McDonnell said the budget crisis won't deter him from moving ahead on pledges to find new transportation funding and increase incentives for economic development and job growth. He said he would pursue a plan to privatize the state's liquor stores despite opposition in the Democratic-controlled Senate, and will fulfill his promise to reopen 19 interstate highway rest areas within 90 days of taking office. The state closed the rest stops in a cost-cutting move earlier this year.
