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Virginia Gov. Tim Kaine (left), shown giving a wink to House Speaker Bill Howell, R-Stafford, last June, says the federal stimulus money won't be used to close budget gaps. Some legislators, including Howell, agree with that philosophy. |
RICHMOND
--Gov. Tim Kaine expects Virginia will receive about $4 billion from the proposed economic stimulus package currently being debated in Congress.But he and legislative leaders all said that money shouldn't absolve them from making difficult budget cuts this session to close a $3 billion budget shortfall.
"I don't know at the end of the day this will reduce budget cuts," Kaine told reporters yesterday. "I think it's shoring up against the erosion of the economy. I don't think it's going to take hard decisions off our shoulders."
Details of the federal stimulus package are vague because it could--and is likely to--change as it passes through the House and Senate.
As it stands now, it seems that states would get some money already earmarked-- such as money for transportation infrastructure or for federal programs such as Medicaid.
The state's portion of Medicaid funding is among many programs for which Kaine has proposed to reduce funding to cover the budget shortfall.
The shortfall could grow if the state's revenues have worsened since Kaine's last projections. Officials are due to find out at the end of this month.
Kaine said the federal money could mean not that the $3 billion in cuts won't have to be made, but that more cuts won't need to be made even if revenues have dropped further.
He said he wrote his proposed budget knowing that President Obama would push for an economic stimulus plan but without counting on money from it.
"I felt the right thing to do was write the budget as if there was no stimulus package," Kaine said. "None of us have a crystal ball about when [the economy] is going to turn around."
At least two state lawmakers agree with Kaine that the stimulus money shouldn't be viewed as a bailout to save the state from budget cuts.
State Sen. Edd Houck, D-Spotsylvania, a member of the budget-writing Senate Finance committee, said the budget cuts will still be necessary.
But, he said, federal money would "ease some of the pain.
"It won't resolve all of our problems, but it will help," Houck added.
House Speaker Bill Howell, R-Stafford, and other House Republicans yesterday announced an economic stimulus package of their own--a group of bills primarily designed to encourage businesses to invest in Virginia. One of the bills also jump starts five capital building projects.
Howell said he wouldn't reject federal money but warned that it shouldn't be used to fund ongoing programs, since the state would then have to pick up the tab when the federal money runs out.
The Republicans were critical of the federal stimulus package as it stands now, saying they wish it had more money for infrastructure such as transportation.
They also want more input as to how that federal money would be used in Virginia.
"Some of the information we already have does not lend enough light on this subject," said Del. Lacey Putney, I-Bedford, the House Appropriations Committee chairman. "We're hoping we're going to get some details on that before we have to draft a budget."
Therein lies a problem for Kaine and state legislators: They have until the end of February to finish revising the state's two-year budget and close that $3 billion shortfall.
That gives them little time after they get their next revenue numbers, and they are not yet able to plan around a federal stimulus bill that hasn't been passed yet.
Kaine was due to meet yesterday afternoon with Houck and other budget-writers in the legislature to discuss those items.
Chelyen Davis: 804/782-9362
Email: cdavis@freelancestar.com
