GOP Says Shortfall In Budget Is Likely
Kaine Awaits Jan. Tax Figures Before Considering Cuts

By Tim Craig
Washington Post Staff Writer
Friday, February 1, 2008

RICHMOND, Jan. 31 -- House Republican leaders warned Thursday that there may be a shortfall of as much as $1 billion in Gov. Timothy M. Kaine's 2009-10 budget, and they demanded that he quickly revise revenue projections.

During a speech on the House floor, Del. Phillip A. Hamilton (R-Newport News) said the House and Senate money committees need to quickly begin work on strategies for reducing Kaine's $78 billion, two-year spending proposal.

"Don't let anyone fool you. These are tough, difficult times," said Hamilton, vice chairman of the House Appropriations Committee.

Hamilton said Kaine (D) has not been forthcoming about a shortfall in state revenue, which makes it difficult for legislators to come up with a budget package over the next few weeks.

Kaine resisted calls to update his revenue estimates in January, despite pressure from GOP legislators. He said he will unveil those figures in mid-February after his administration has had time to calculate January tax-collection rates.

In an interview Wednesday with Washington Post editors and reporters, Kaine said he does not know how much his budget proposal may have to be reduced.

He said that the administration was to receive tax-collection data by late Thursday and that he would spend the next several days evaluating the information before he offers solutions to the General Assembly.

Kaine acknowledged, however, that spending cuts may be needed. Kaine also warned that he may seek to withdraw more from the $1.2 billion rainy-day fund in addition to the $261 million he has proposed.

Although he faces tough choices, Kaine said Virginia's stable economy means that the state's fiscal outlook is far brighter than that of many other states.

"I don't view this as cataclysmic," Kaine said. "We will be relatively well off, but relatively well off may still be sort of painful."

Del. Clarke N. Hogan (R-Charlotte) suggested Thursday that instead of working on the budget, Kaine has been too focused on the presidential campaign of Sen. Barack Obama (D-Ill.). Kaine, who endorsed Obama last year, occasionally campaigns for the senator in other states on the weekends. He is to campaign for Obama this weekend in Georgia.

"Where is the governor? What is he doing? . . . We can't do our job until he does his," Hogan said. "We see trips to Iowa. What is he trying to do to figure out this budget?"

Democrats condemned Hogan's remarks, accusing him of needless partisanship.

House Minority Leader Ward L. Armstrong (D-Henry) said, "Why release revenue estimates when we are not sure what the data is?"

Delacey Skinner, Kaine's communications director, said: "This is a process we are going to work with the General Assembly on, just like we have been working with the General Assembly on, and it is not going to help us make good decisions if folks are more focused on throwing barbs than having a real discussion on looking at what we may be looking to cut."

When Kaine presented his two-year budget plan last month, he said the increase in state revenue would about double, to 6.6 percent from 3.2 percent, by fiscal 2010.

Kaine had hoped to use that increase to give teachers and state employees a pay raise in fiscal 2010 and increase funding on education, health care and environmental initiatives.

House Republicans, who earlier objected to taking money from the rainy day fund, could now be persuaded to use it to help close any shortfall, Hamilton said. But House and Senate Republican leaders need updated numbers from Kaine soon so they can complete work on a version of the budget in three weeks.

"We cannot operate in the dark," House Majority Leader H. Morgan Griffith (R-Salem) said. "We say to the governor, 'Turn on the light, no matter how bad it is.' "

Democrats, who accused the Republicans of playing politics with the budget, said it is customary for governors to wait until early February to revise revenue forecasts.

"We are going to do the budget the best we can, but it's not because the governor is not doing his job," Del. James M. Scott (D-Fairfax) said.