Gov. Tim Kaine warned Monday that he must either tap the state’s Rainy Day Fund to close a budget gap or face laying off state workers, a threat that GOP lawmakers swiftly dismissed as political gamesmanship.
At a meeting of the House Appropriations Committee, Kaine’s top revenue expert, Secretary of Finance Jody Wagner, said rejecting a proposal to tap the state’s budget reserve account, known as the Rainy Day Fund, could force an unspecified number of layoffs among state employees.
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Virginia faces a $641 million revenue shortfall for fiscal 2008. Republicans have panned Kaine’s idea of using the $1.3 billion Rainy Day Fund to help eliminate the shortfall, preferring the governor constrain state spending.
“They are trying to throwlayoffs out there and get everyone scared,” said House Majority Leader Morgan Griffith, a Republican from Salem.
Kaine and some Democratic lawmakers support solving the budget problem by using spending cuts along with drawing money from the reserve account.
The governor has already ordered state agencies to propose 5 percent spending reductions for his consideration.
“It looks like revenues are going to be down considerably, and the numbers may get worse,” said Del. Jim Scott, D-Fairfax, an appropriator who backs tapping the Rainy Day Fund. “We have pumped a lot of money into that fund, and it is there for a purpose.”
But Republicans have dug in their heels on the issue of drawing from the reserve fund.
“If we begin the practice of utilizing the state’s Rainy Day Fund during a nonrecession period, then we run the risk of establishing a bad and undesirable precedent that suggests we can overspend taxpayer resources without consequence,” said Del. Vincent Callahan, R-McLean, chair of the Appropriations Committee.
Wagner’s comments were the first public statement tying use of the reserve account to avoiding the need to trim the state’s 100,000-employee payroll.
The wrangling over the budget should be seen in a political context, analysts said. All 140 legislative seats are up for election in November.
“In an election year, you have to expect these exchanges will be used to set up issues for the campaign,” said Mark Rozell, a political science professor at George Mason University. “It might help politicians but it doesn’t help the budget process much.”
Before state workers face unemployment, Kaine’s spokesman said, the governor would look to eliminate vacant positions and to reduce the payroll via attrition.
