Virginia Gov. Tim Kaine will reveal today how far in the red the commonwealth ended the last budget year and outline measures he is taking to control spending in the current budget cycle.
Kaine said last month that the deficit for fiscal 2007, which ended July 1, was about $200 million — about $100 million less than Virginia finance officials previously estimated. The governor also is expected today offer some predictions on Virginia’s economy and whether the deficit will carry into the current fiscal year, which is the second leg of a $73.8 billion biennial budget.
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“Now that all the bills have been paid for fiscal 2007, we have a better idea of where we are,” Kaine spokesman Kevin Hall said.
Kaine, a Democrat, will wait until December to issue revenue projections that will show how much, if any, spending will need to be cut in the next two-year budget that will take effect July 1, 2008. That budget will be critical to Kaine’s legacy. It is the only biennial spending plan he will fully propose and implement during his four-year term because Virginia governors cannot seek re-election.
“We are facing a difficult budget year,” said Lt. Gov. Bill Bolling, a Republican.
The tight budget situation has not caused General Assembly members to swear off creating new programs in next year’s budget, but they admit they will have to be extra careful with their allocations. For example, legislators know there will be significant pressure to increase funding for mental health services in response to the Virginia Tech massacre. Also, the next increase in the state’s per-student payments to local school districts is scheduled for the fiscal 2009 budget.
“Going into the next session, we have to be very, very cautious,” said Del. Philip Hamilton, R-Newport News, a senior legislative budget writer. “It doesn’t mean there will not be any new programs, but it does mean we will have to existing resources to fund new programs.
“If we have something that is new and is a high priority, we are going to have to take resources from another program that is not performing well or has already run its course.”
