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Senate Finance Committee meets Date published: 11/21/2008
BY CHELYEN DAVIS State Senate budget-writers say the state's budget shortfall could be a billion dollars worse than predicted, and is likely to require cuts to public education and other services. At the Senate Finance Committee's annual budget retreat, held here yesterday and today, staffers told senators they think Gov. Tim Kaine's estimate last month of a $2.5 billion budget shortfall over two years is too optimistic. The staff believes the shortfall will be more like $3.2 billion to $3.5 billion. They think this because the recession seems to still be worsening, and consumers are cutting back spending--something they didn't do in the 2001 recession--due in part to increasing limitations on credit. The Senate staff also fears the recession may last for four fiscal quarters, instead of three. "We believe the situation has deteriorated over the last several months," said committee Chairman Sen. Chuck Colgan, D-Prince William. "Our fiscal outlook is uncertain at best. As a result we must err on the side of caution." As a result of the worsening economy, Kaine announced last month that he was lowering revenue estimates, expecting a $2.5 billion shortfall between now and 2010, and would cut the budget and use some of the state's Rainy Day fund to cover the shortfall. But Kaine is limited in what he can cut on his own, without legislative approval. And his own budget proposal, due in January, may reflect more gloomy prospects closer to the Senate's estimate. Kaine avoided cuts to K-12 education and services like Medicaid, but senators yesterday said they will almost surely have to make cuts to those areas to meet this shortfall and prepare for a long, slow economic recovery. That's preferable, they said, to using budget gimmicks or one-time cuts to fix an immediate budget problem, which is what Colgan said they did in the last recession. "We don't want to repeat the error," he said. Education and aid to localities and individuals are on the table because they comprise the bulk of the general fund budget. Education funding makes up more than a third of the general fund budget; aid to localities, which includes money for schools, is half of the general fund budget. Aid to individuals comprises 15 percent of the 2008-2010 budget; of that, 84 percent is Medicaid funding.
State Funding budgets for schools from 1999 to 2010 were up an average of only 5.85%/year while general fund revenue was up an average of 6%. Greater cost increases that for schools were for Car Tax Collection Cost 14.7%; Child Support Enforcement 13.9%; Debt Service 11.0%; Comprehensive Services Act 10.2%; Aid to Localities – Police Dept. 9.8%; Indigent Defense 9.2%; Medicaid 7.5%; MHMR Grants to Localities 7.0%; College Financial Aid 6.6%;
Do we really need classes in high school like "Sports Marketing"?
...they will make smart cuts. There is always plenty of pork in Central Office that can be cut, but they never eliminate those positions. Past experience shows that the counties will respond to the state cuts by saying that they will have to cut essential school personnel unless local property taxes can be increased to make up the difference - its the old "the budget is blown so we'll have to get rid of police and fire fighters" ploy.
This makes no sense - cut education so that all the stupid people in Richmond and wall street and DC who caused this mess can never be replaced by someone with even half a brain.
that our elected representatives are starting to understand that unconstrained spending is not contributory to favorable economic conditions?
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