Kaine's Latest Cuts: More Fallout from the Republican Recession

Just keep in mind that the cuts outlined by Gov. Kaine below are taking place in states all over the country, as a response to the nasty economic recession - worst since the 1930s - left to us by the Bush Administration and Republican economics. Everyone should also keep in mind that Bob McDonnell seriously believes that Bush's economic policy is "the reason that we’ve had this economic revival in America." Utterly clueless and unqualified to be governor (unless, of course, you're the type of person who thinks that Jim Gilmore and George W. Bush did great jobs).

Governor Timothy M. Kaine today announced his executive spending reduction plan to meet the FY 2010 revenue shortfall of $1.35 billion. The Governor’s plan trims government spending by reducing the scope of some government programs, while protecting K-12 education and other critical government functions.

“The Commonwealth is continuing to manage the worst economic downturn since the Great Depression both responsibly and transparently,” Governor Kaine said. “There’s no question we remain in the midst of the toughest economy in a generation. But we also remain confident that Virginia will weather the storm and emerge stronger than ever before.”

The official revenue reforecast results in a budgetary shortfall of $1.35 billion for FY 2010. The reforecast brings the total revenue shortfall for the biennium to more than $7 billion. This marks the fourth time in the 2008-2010 biennium that Governor Kaine has made budget reductions to meet the challenges presented by the ongoing economic crisis.

Despite the need for major budget reductions for FY 2010, Virginia has minimized the impact on localities, refrained from enacting general tax increases or freezing capital, refrained from issuing any new debt, and implemented strategies using ARRA funding to protect K-12 and decrease budget reductions to 50 percent of what would have been required for higher education. In particular, use of the Revenue Stabilization Fund in FY 2010 enables state leaders to protect certain critical services from major cuts, most prominently K-12 education.

The Governor’s savings actions include:

· Recovering over $74 million in general fund and more than $68 million in nongeneral fund balances from FY 2009;

· Capturing savings of over $22 million resulting from Governor’s directives to agencies in May to immediately implement cuts in discretionary spending;

· Reducing agency spending by over $403 million, based primarily on the recommendations made by state agencies in their 5, 10, and 15 percent reduction strategies; and

· Further savings are achieved through targeted strategies that will reduce general fund spending by an additional $446 million—including more than $104 million in reduced payments to the Virginia Retirement System (VRS) for the final quarter of FY 2010. Contribution rates for the Commonwealth and its employees will be changed in July at the beginning of the next biennium to adequately fund the long-term needs of the retirement system.

The Governor’s reduction strategies include:

· $18 million in improved business practices and efficiencies;
· Nearly $235 million in the reduction or elimination of current services;
· More than $170 million in reduced personnel costs; and
· More than $28 million in reduced discretionary expenses.

Other major actions in the Governor’s reduction plan include:

· The elimination of 929 positions—including 593 layoffs.

· Reductions of 13 or 15 percent to institutions of higher education.

· Reductions in administrative costs that will prevent deeper cuts in direct service delivery.

· Restructuring of Department of Corrections facilities, closing two older facilities and one juvenile correction facility.

· A one-day furlough of all state employees on the Friday proceeding Memorial Day 2010. Agencies with critical or emergency personnel are instructed to accommodate staffing needs and make adjustments to the furlough date accordingly.