Gov. Tim Kaine will brief lawmakers Monday on the ever-shrinking state revenues that threaten to plunge the commonwealth into deeper financial trouble, potentially laying the groundwork for widespread cuts.
Nearly a month after his administration laid out a broad freeze on hiring, contracting and travel for state agencies — and predicted possible layoffs — the governor is expected to jointly address the General Assembly’s funding committees to give a clearer picture of the state’s downward economic trajectory and how he plans to deal with it.
State budget officials are worried they will not be able to collect the revenues needed to meet spending in the two-year $77 billion budget, especially the predicted 6.7 percent growth rate in fiscal 2010 that budget staffers say is increasingly unlikely. They are worried about two key sources of revenue — payroll and sales tax — bringing in far less than expected.
Kaine spokesman Gordon Hickey said the governor has not arrived at an official estimate for the size of the shortfall and will not release one Monday. Some speculation among lawmakers puts that figure at $1 billion through 2010. An official revenue re-forecast is expected in October.
Del. Kirkland Cox, R-Colonial Heights, a member of the House Appropriations Committee, said the tentative estimate is based on budget staff analyses of revenue trends in recent months.
A $1 billion shortfall “is possible,” said Del. Robert Brink, D-Arlington, also an Appropriations Committee member.
“We’re looking at shortfalls in two major revenue sources, and very often the case once you get into these cycles is that the bad news kind of snowballs,” he said.
Cox blamed the Kaine administration for optimistic revenue estimates and questioned whether the governor would target for cuts his recent initiatives, like the expansion of pre-kindergarten to more low-income children.
“Would he look at [cutting] a program like that, or would he not look at a program like that because he’s trying to hang a little bit of his reputation nationally on those types of programs?” Cox said.
Kaine is reportedly under consideration to be presumptive Democratic presidential nominee Sen. Barack Obama’s running mate.
