Governor reveals state budget cuts this morning

RICHMOND, VA (WWBT) – Big cuts to the state budget that will hit several departments from education to requiring state workers to take unpaid days off.

Gov. Bob McDonnell released his plan this morning at the State Capitol. He called the cuts to trim $2.1 billion from the state budget "among the toughest decisions I have had to make over my entire career in public service."

Virtually no one in state government will be spared from these budget cuts, which Gov. McDonnell said are five times more than any previous amendments made to a prior governor's budget plan.

The cuts will impact, schools, state employees, health care workers and correctional officers.

McDonnell has already met with legislative leaders in both the House and Senate and believes he has a good chance at getting some the changes passed.

Here is a look at some key areas:

-Total cuts: $2.2 billion
-Education cuts: $700 million
-State employees: 5 furlough days, Christmas bonus in 2011

Now mixed with all this gloom and doom, there was some good news. McDonnell's Secretary of Finance, Ric Brown believes that the revenue picture at the state will improve over the next two years. However that improvement will be marginal compared to the budget hole the state is facing.

McDonnell formally proposed unfreezing the (Local Composite Index) funding formula. That could mean an $11 million loss for Richmond schools. On the LCI, McDonnell said there are always winners and losers, but "it is still the right thing to do." Read more on the LCI below.

The Local Composite Index determines a school division's ability to pay education costs fundamental to the commonwealth's Standards of Quality (SOQ). The Composite Index is calculated using three indicators of a locality's ability-to-pay:

  • True value of real property (weighted 50 percent)
  • Adjusted gross income (weighted 40 percent)
  • Taxable retail sales (weighted 10 percent)

Each locality's index is adjusted to maintain an overall statewide local share of 45 percent and an overall state share of 55 percent.

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