Thursday, February 18, 2010
McDonnell's cuts target schools, state workers
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RICHMOND -- Gov. Bob McDonnell went public Wednesday with his recommendations for $2.1 billion in spending cuts that he called "the most difficult decisions I've had to make in public life."
His suggestions include nearly $730 million in reductions to K-12 education, freezing enrollment in a health insurance program for low-income children and pregnant women, and requiring state workers to take as many as 10 unpaid days off and contribute more toward their pensions. And, on a day McDonnell reopened four shuttered rest stops, he also recommended closing five state parks -- none in Western Virginia.
"There's no doubt in my mind it will cause hardship for real Virginians," McDonnell said. But he maintained his campaign pledge not to raise any taxes.
Reaction came quick from legislators, who now must craft a budget plan.
House Majority Leader Morgan Griffith, R-Salem, said McDonnell's recommendations were welcome.
"We all are going to have a lot of tough decisions," Griffith said. "Ours may not be the same tough decisions the governor makes, but we're all trying to get to the best budget we can get with the money we have."
Sen. Janet Howell, D-Fairfax County, a member of the Senate's budget negotiating team, said the governor's proposal to eliminate funding for a school breakfast program for low-income children was "the most tragic."
Sen. John Edwards, D-Roanoke, called McDonnell's overall proposal "a political tsunami."
"It's the biggest jobs-cutting budget I've ever seen," Edwards said. "When people find out the number of teachers that will have to be let go ... the number of health care workers that will be let go ... the number of services that will be cut, they will be outraged."
"The shame of it is, it's unnecessary," said Edwards, who said lawmakers could cushion the severity of the cuts by rolling back car tax relief subsidies as former Gov. Tim Kaine proposed.
McDonnell defended his decision to protect $1.9 billion in car tax relief payments over the next two years while cutting school funding and other services.
"From my study of economics, I don't think that levying additional significant taxes in a recession is the best course of action to recover from that economy and to create more prosperity in the long term," McDonnell said. "With a 6.9 percent unemployment rate and others struggling to make the decisions they're making in their personal and professional life, what they don't need is $2 billion more in taxes. I think it's the better course of action to trim even further, to be innovative, to find ways to make the reductions."
House Appropriations Committee Chairman Lacey Putney, I-Bedford, said McDonnell's recommendations "are pretty much in line" with the blueprint being hammered out by the House budget-writing panel.
But, Putney said, "I don't find much appetite on the House side for using furloughs for state employees." Putney said members have concerns about how the furloughs will be implemented, particularly in state hospitals and corrections facilities.
Senate Democrats are divided over whether to propose a balanced budget that relies entirely on cuts, but Howell said the Finance Committee will produce a plan by its Sunday deadline.
Of the $730 million in proposed cuts to local schools, the largest bite comes from resetting the funding base to that used in fiscal year 2006, a two-year reduction totaling $225 million. Other cuts to education include $130 million from removing state salary supplements for sports coaches and department heads, nearly $92 million from eliminating initiatives such as Mentor Teacher and school breakfast programs and nearly $20 million in savings from extending the work lives of school buses.
Griffith defended McDonnell's decision to lift a proposed freeze on adjusting the state's local composite index school funding formula. It measures a locality's ability to pay for its public schools, and Kaine had proposed delaying an adjustment to the formula in his December budget. Lifting the freeze will steer more money to Northern Virginia at the expense of other localities, but Griffith said the governor is right to propose the change.
"If we start saying when it benefits another region of the state that we don't like it, then in a couple of years they may do away with it and we'll be getting the short end of the stick," Griffith said. "It's helped us for 30 years. It hurts us this year. But I suspect it will help us for 30 years in the future, and messing with it and playing games with it in a single year is foolish."
Virginia School Boards Association Executive Director Frank Barham warned that if the cuts are incorporated by legislators, schools would have to lay off tens of thousands of teachers, raise class sizes and cut programs.
McDonnell's budget proposal promises to be a bitter pill to swallow for local school districts already struggling to balance their budgets. In Bedford County, for example, the school superintendent has proposed eliminating 124 full-time jobs, including 67 teaching positions, and closing two elementary schools in Thaxton and Body Camp. The superintendent's goal was to come up with a fiscal year 2011 budget $5 million smaller than this year's $100 million budget.
Now, said schools spokesman Ryan Edwards, officials must figure out the potential impact of McDonnell's budget proposals. McDonnell plans even deeper reductions -- nearly $925 million -- from compensation and benefits to state employees.
That includes requiring state employees to take up to five unpaid furlough days off each of the next two years -- which would save an estimated $180 million. State workers have already been put on notice that pay raises are out for the time and that new employees will be expected to fund more of their retirement plans. But McDonnell said he would recommend a 3 percent bonus to state employees in December 2011.
As another counterbalance, McDonnell asked legislators to reverse a Kaine proposal that called on existing state workers to pay a share of their retirement contributions.
In his plan, McDonnell recommends reducing payments to the state pension system by $786 million.
The $522 million in local savings that would be realized from the pension plan adjustments could be used by local governments to mitigate the impact of his proposed education cuts, McDonnell added.
The new Republican governor, just one month in office, also recommends nearly $300 million in cuts to Health and Human Resources programs, the legislative summary says. Some of those programs are a lifeline to the state's poorest residents.
Within the Department of Social Services, for example, McDonnell has suggested eliminating general fund support for nine programs outright, including $1.2 million for homeless assistance programs, $700,000 for domestic violence services, $4.8 million in child support supplements and $3.6 million for the state Healthy Families initiative.
From the Department of Health, McDonnell's lieutenants have suggested eliminating nearly $1 million from a teen pregnancy prevention program, cutting $1.8 million for the Virginia Association of Free Clinics, trimming $2.2 million from the Virginia Health Care Foundation and eliminating local health department dental care services.
McDonnell's first news conference on the state's budget crisis comes one day after a monthly report from Finance Secretary Richard Brown showing a 6.5 percent drop in January revenues. The state is seven months into the current fiscal year and revenue collections are already 4.7 percent behind what they were for the same period last year. The fiscal year ends on June 30.
Staff writer Rex Bowman and The Associated Press contributed to this report.
