McDonnell Calls for Sacrifice with Deep Budget Cuts

By Desiree Parker Wednesday, February 17, 2010

On the day he reopened several closed rest stops in the state, Governor Bob McDonnell released his new amendments to former Governor Kaine’s budget, slashing an additional $2.2 billion while sticking with his promises not to raise taxes and to maintain car tax relief.

The biggest losers in McDonnell’s plan are state employees, with cuts totaling nearly $970 million; K-12 education, set to lose $731 million; and health and human resources, which could lose $316 million. In addition to more extensive reductions than his predecessor recommended, McDonnell rejected many of Kaine’s proposed cuts to public safety and increased spending on economic development by $50 million.

He also proposes closing five state parks and laying off the associated staff, at a savings of $12 million, and reducing aid to localities by $50 million.

“While this will be a very difficult stretch for many Virginians, state agencies, and local governments, it is a time that calls for sacrifice, creative management, and innovation,” McDonnell said. “I call on all our leaders and stakeholders to work together to find ways to lessen the hardships as we slowly rebound from this devastating economic downturn.”

Facing a nearly $4 billion shortfall over the next two years, McDonnell refuses to accept the one percent tax increase Kaine proposed, which would have brought in $2 billion for the state. In addition, he wants to keep the $950 million car tax relief the state pays out to residents. “Tax increases only serve to potentially dampen the economic recovery in Virginia, and allocate scarce resources away from our citizenry at a time when they can least afford it,” McDonnell said.

His first priority is to enhance economic development and job creation tools, and a close second is maintain the state’s triple A bond rating, according to the governor. Ensuring public safety is the top responsibility of the government, McDonnell said, so he aims to restore at least $60 million in funding (cut in Kaine’s budget) to sheriffs and police officers, though he’ll still get rid of about $45 million from public safety and courts.

To support his priorities, McDonnell focused his cuts in other areas. First on the chopping block is funding for state employees. A total of 10 days of furloughs over two years will add up to savings of over $180 million in the governor’s proposal. Public school employees and various public safety workers like state troopers and sheriffs are exempted.
State employees, who haven’t gotten raises since 2007 and won’t see them again until at least 2012, will get a three percent bonus in December of 2011, at a cost to the state of $82 million.

McDonnell also proposes $612 million in retirement contribution reductions for new hires, $119 million in other retirement benefit cuts, and $55 in reductions to state employee health insurance costs.

The $731 million in reductions to K-12 education focus on non-instructional spending as much as possible, according to the governor, but “this will create a short term hardship on our great teachers and school administrators.

“Restoring education funding will be a top priority as the budget situation improves… I believe our excellent public school administrators will use creative management and instructional techniques to meet the needs of every student.” (Read about the governor’s proposed budget’s impact on education here.

Health and human services programs – the so-called safety nets for the increasing numbers of poor and at-risk adults and children across the state – will be cut by $316 million. Many programs were eliminated completely, such as the Medicaid coverage of consumer-directed companion care services, which is covered by waivers for the elderly and disabled, HIV/AIDS patients, and those with developmental and intellectual disabilities.

Funding for Healthy Families Initiative of Virginia, a voluntary program that offers home visits to high-risk families, will also be eliminated, as will the adult portion of the general relief program, which provides cash assistance and services to people with little or no income in order to avoid more intensive welfare services.

Also eliminated is funding for child advocacy centers, which provide services for children and families experiencing abuse and neglect; Teen Pregnancy Prevention Initiative funding; and funding for local domestic violence grants.

The governor also proposes to reduce spending on homeless programs by $6 million.

“I remain committed to finding more efficient ways and more effective programs and services that will meet the demands of our most vulnerable citizens,” McDonnell said.

He aims to have the budget passed through the General Assembly by March 13, he said.