Gov. Tim Kaine said Thursday he expects to recommend fresh budget cuts due to increasingly grim state revenues, a drop legislators tentatively say could add more than $200 million to this year’s existing shortfall.
Kaine delivered the bad news on Richmond’s WRVA radio, confirming predictions that the lagging revenue would shrink both current spending and the governor’s proposed $78 billion two-year budget.
“It looks pretty likely I’m going to come back to the House within the next two weeks and recommend an additional downward reduction,” he said.
Del. Jeff Frederick, R-Woodbridge, who sits on the House Finance Committee, and Del. Phil Hamilton, R-Newport News, an Appropriations Committeemember, said they have been told the downturn will cut revenues by $200 million to $250 million, though those figures remain unofficial. It also could bring a combined $800 million to $1 billion shortfall over the next two years, Hamilton said.
Kaine already had trimmed $300 million from state spending in October after revelations of a $641 million shortfall and has proposed to tap the state’s “rainy day” reserve fund to help close the remaining balance.
The worsened revenue picture could prompt to governor to dig deeper into that fund and threatens to force him to scrap some highly touted proposals, like expanded prekindergarten to more low-income children.
Kaine spokesman Gordon Hickey said “there is nothing off the table at this point” on potential cuts. He said the administration is waiting to see January tax receipts before it releases final numbers.
The economic downturn hit state coffers in three key areas, budget planners said earlier this month: Non-withholding individual income, corporate taxes and the recordation tax, all of which dropped about 20 percent in December from the same time the year before.
Republicans accuse Kaine of delivering bad original forecasts and withholding needed budget data, which Hickey rejected as “disingenuous.”
“We rely on the governor for revenue numbers … he gave us those numbers, we took those at face value, enacted a budget last year based on those numbers, and now those numbers aren’t coming to fruition,” Frederick said.
The Associated Press contributed to this article.
