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Gov. Timothy M. Kaine briefs reporters on the impact the federal stimulus package will have on the Virginia state budget that is being written in Richmond. |
By Chelyen Davis
RICHMOND--
State officials finally have the latest numbers for state tax collections and the federal stimulus package, and say they should be able to finish rewriting the state budget within the next two weeks.The key news for budget-writing legislators is that they shouldn't have to make further cuts to the two-year state budget, which was written to accommodate a $2.9 billion shortfall over the next two years.
The revenue numbers for January did show a steep decline--$800 million, which would put the state's budget shortfall around $3.7 billion.
But Gov. Tim Kaine says federal money from the stimulus package will more than offset that, and he doesn't believe the budget needs to be cut further.
While not all the details of the federal stimulus bill are clear--a lot of the money is earmarked for certain programs, like public education, and rules for how it will flow to the states have yet to be determined--Kaine said the state can count on about $1 billion, mostly for Medicaid spending and some for a more open-ended stabilization fund the state can use to soften cuts in other areas.
As a result, he wants to reverse two budget cuts he proposed last December--the postponement of 200 new mental retardation waiver slots, and a cap on certain Medicaid enrollments.
Overall, Virginia is expecting about $4.5 billion from the federal stimulus, over the next two years.
Kaine said yesterday he still thinks he and the legislators were wise to cut $2.9 billion out of the budget, because while the federal money is helpful, "we still have a challenged economy."
Kaine cautioned that state revenues could dip further as the year progresses, and the state should maintain a financial cushion in its budget.
"The best thing to do is not count on any of that" federal money, he said.
As a result of the news of the stimulus money and the state's own tax collections, Kaine said he thinks that the legislators who write their version of the state budget "have what they need to go ahead and do the budget."
The House of Delegates passed its own version of the budget last week; the Senate postponed action until this Wednesday, waiting for these new revenue numbers.
Kaine explained the numbers to the budget writers yesterday morning in a private meeting.
Afterward, Sen. Edd Houck, D-Spotsylvania, said he's glad they won't have to cut the budget further, but that the state tax collection numbers were as bad as expected.
"It's rather staggering," he said. "There's really no light at the end of the tunnel."
Del. Phil Hamilton, R-Newport News, also a budget writer, said he feels comfortable that lawmakers can finish and pass a budget before their adjournment on Feb. 28.
Even so, he and Kaine both said there will be some aspects of the stimulus package that won't be known until after that date.
Kaine says he wants to keep in touch with the budget conferees during the 30 days between the legislature's adjournment and their return to deal with his amendments and vetoes of bills.
If necessary, Kaine said, he can propose amendments to the budget to account for new information about federal money, and legislators can approve those amendments during their veto session. He'd keep in contact with them during the interim to make sure the amendments were acceptable.
Meanwhile, local governments are waiting for a state budget to be finalized before they finish writing their own budgets, which contain state dollars.
Kaine said local governments "should be feeling great," since they'll get a piece of the federal stimulus pie as well.
"This is going to lift some of the weight off local government's shoulders," he said.
Kaine's office has a Web site, stimulus.virginia.gov, where people can suggest projects that would benefit from stimulus money.
As of yesterday, Kaine said, there were 1,600 suggestions. Many seem to be from local governments--descriptions of local road projects, water and sewer projects, new schools that need building.
Others are comments--some about rejecting the money in the name of fiscal responsibility, a couple requesting a tax refund, and at least one advocating creating jobs by arresting all illegal immigrants and building new jails to house them.
Chelyen Davis: 804/782-9362
Email: cdavis@freelancestar.com
