Virginia agencies plan for ‘fiscal cliff’

RICHMOND — State corrections officials suggested closing “several” prisons for a saving of nearly $30 million. A state-run museum proposed forgoing the services of the professional window dresser who pretties up its gift shop displays for $5,000 a year.

In big ways and small, Virginia agency heads came up with ways to save money, identifying budget cuts — made public Friday — that they hope they won’t have to make.

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At the request of Gov. Robert F. McDonnell (R), state agencies started looking in early November for ways to cut budgets by 4 percent. The search for trims is an annual exercise, but it took on new urgency this year because of fiscal uncertainty in Washington.

If Congress and the White House fail to reach a deficit-
reduction deal by Jan. 1, a combination of tax increases and defense and domestic spending cuts will take effect. The defense cuts could hit Virginia especially hard because of the heavy concentration of military installations and federal contractors.

McDonnell told agency heads that he wanted to be ready with a plan in case the national economy and state revenue go off that “fiscal cliff.”

State agency heads came back with a list of potential budget cuts. McDonnell’s office released their proposals Friday but stressed that no decisions had been made about any of those potential reductions.

“At this point, it’s all academic,” McDonnell spokesman Tucker Martin said.

Agency heads’ larger proposals included reduced payments toward the retirement benefits of some state employees, for a savings of $12 million, and a nearly $10 million across-the-board cut to funding for sheriffs, regional jails, commonwealth’s attorneys and Circuit Court clerks.

Smaller cuts were proposed for a wide variety of programs, including aid to visually impaired children, local libraries, homeless families and beekeepers.

Apart from the uncertainty in Washington, Virginia’s fiscal health appears good. The state posted a budget surplus of nearly $130 million for fiscal 2012 and has reported surpluses for each of the past three fiscal years.