Virginia officials will need to slash as much as $3 billion more in spending through mid-2012 as a slow economic recovery does little to lift tax revenues, state budget staff said Tuesday.
The forecast signals that the governor and lawmakers will be faced with an even more grueling round of spending cuts than earlier thought.
The shortfall through June will be as much as $300 million wider than expected, House Appropriations Committee Staff Director Robert Vaughn told legislators. And for the upcoming two-year budget, the state will need to close another gap of as much as $2.7 billion.
The projection gives a clearer picture of the fiscal crisis that will fall into the lap of Gov.-elect Bob McDonnell in January, when he takes office and the General Assembly convenes its 2010 session. Gov. Tim Kaine is expected to release a grim plan for cuts next month that will then be handed off to the incoming executive.
The magnitude of the shortfall makes it likely that all sectors of state government, including education — the single largest part of general fund spending — will be targeted for reductions.
“Education is the biggest part of the budget, certainly I think you’ll see some cuts in K-12,” said Del. Kirk Cox, R-Colonial Heights, a member of the appropriations committee.
Cox expected the legislature to renew debate over capping state funding for school support staff — which could save more than $700 million over the next two years — and reassess programs expanded in recent years, such as prekindergarten.
When lawmakers return to Richmond, “we must be committed to making difficult choices,” House Appropriations Committee Chairman Lacey Putney, I-Bedford, told his colleagues.
“Many of these choices may not be popular, but will be necessary if we are to balance our budget within the constraints of our available revenue stream,” he said.
Vaughn said the federal stimulus bill has not brought about a measurable increase in jobs, but has allowed state and local governments to forestall cuts and layoffs. Stimulus funding, he said, will offer a “partial cushion” in fiscal 2011, but will peter off midyear.
