RICHMOND, VA (WWBT) - It's a walk that Governor Kaine has made so many times recently - he claimed to have lost count.
"I don't even know what round of cuts this is, you can count them different ways," said Kaine.
In response to a budget gap of about $1.3 billion, the governor proposes a new cut of 929 positions, including 593 actual layoffs. And it goes beyond state agencies.
"I will say, the 593 layoffs do not include layoffs that may happen at the higher education institutions," Kaine said.
Colleges will see their funding cut by up to 15 percent, though stimulus dollars will offset some of that. And then there's the unpaid day off for everyone else who keeps their job.
"Many other states have seen furloughs of weeks. One day a week, for the entire year. We've managed to avoid that, thus far," said Ron Jordan, Virginia Governmental Employees Association.
State workers will be on a so-called "furlough", the Friday before Memorial Day 2010, which the workers' association director says, is better than the alternative.
"They don't like the idea of furloughs, but given the choice between furlough or widespread job losses, they'll take the lesser of the evils," said Jordan.
But Governor Kaine, who leaves office at the end of the year, will not be among them.
"The first cut I did, virtually, when I started making cuts is I cut my own salary by 5%. I haven't cut any other state employee's salary, and I've been operating on a salary cut for the last two and a half years. So that adds up to way more than a day of furlough," said Kaine.
Workers can also expect the state to suspend part of the fourth quarter retirement contribution. However, Kaine says that K-12 education will largely be left alone. And there will be no increase in taxes.
The official press release:
Governor Timothy M. Kaine announced today his executive spending reduction plan to meet the fiscal year 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 fiscal year 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 2010, officials say 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.
At 6.9 percent, Virginia's unemployment rate remains approximately two points below the national average and is among the lowest in the nation-especially for a large state. At the same time, Virginia is one of only 7 states that has maintained its AAA bond rating by each major ratings agency.
"While the choices are not getting any easier, Virginia has consistently and thoughtfully worked to protect our highest priorities from the worst consequences of the worst economic downturn since the 1930s," said Governor Kaine. "Even in these tough times, we're continuing to protect access to quality education and maintaining a pro-business environment that encourages economic opportunity for all Virginians."