Republicans Question Kaine's Budget Priorities

By Anita Kumar
Washington Post Staff Writer
Thursday, February 14, 2008

RICHMOND, Feb. 13 -- Members of the Republican-controlled House Appropriations Committee criticized the Kaine administration Wednesday over a budget-balancing proposal that would cut aid to public schools, colleges and local governments to make up for a $1.4 billion shortfall while keeping funding for a variety of new programs.

"What we're saying is, we're going to cut basic aid to public education pretty significantly, and we're going to fund new programs at the same time," Del. Clarke N. Hogan (R-Charlotte) said to Finance Secretary Jody M. Wagner. "I'm trying to figure out how we're going to make that work. I think it's fair to say we're going to fund those by cutting basic aid to education."

The sharp questions to Wagner, mostly by Republicans, came a day after Gov. Timothy M. Kaine (D) announced a budget shortfall through 2010 and recommended significant cuts and possible layoffs.

As the General Assembly enters the midpoint of the 60-day legislative session, amending the current budget and passing a $78 billion, two-year spending plan takes center stage. The House and Senate will consider Kaine's recommendations and release their budget proposals Sunday.

Kaine's proposal includes reducing money for school construction by more than $100 million, cutting aid to local governments by 5.4 percent and reducing grants to public colleges and universities by 2 percent. Higher-education institutions faced cuts of 5 to 6.25 percent last year.

Some delegates asked why Kaine left some of his initiatives in the budget, including those that would expand subsidized pre-kindergarten to 4-year-olds, improve foster care and launch a government program that would help offer health insurance to low-income employees.

"I'm just left with a conclusion it's legacy for legacy," Del. M. Kirkland Cox (R-Colonial Heights) said. "Are you're saying those things are a higher priority, and they are more important than some of the core functions? Isn't that what it comes down to?"

Kaine's recommendations include significantly cutting but not eliminating the new programs. For example, he proposes cutting $12.5 million out of his initial $56 million proposal for pre-kindergarten, $5.8 million out of the $43.4 million for foster care and $5.7 million out of the $7.7 million for health insurance.

Wagner told the committee that the programs will help communities, calling them "an investment in the future."

"When times are tough, you need to look at balancing different priorities," she said. "The governor is very committed to education, extremely committed to K-12 education. On the other hand, there are other citizens of the commonwealth that have needs, too, and this is an effort to balance those needs."

Kaine suggested Tuesday that Virginia cut back aid to state agencies, dip into the state's financial reserves, reduce raises for state employees and teachers, and pay for some building projects with debt instead of cash to help cover an unexpected $1.4 billion budget shortfall through 2010. It was the second time in four months that Kaine has proposed trimming state spending.

"To the greatest extent possible when we are doing expense reductions, I want them to be performance-driven, based on prioritizations, rather than just rough cuts with everything on the same level," Kaine said. "I think that's very important, because at the end of the day, we are measured by the services we provide to those who aren't on Capitol Square."

Like state and local government leaders across the country, Kaine is struggling to balance the budget during a slowdown in the economy. A sluggish housing market, lower-than-expected holiday sales and reduced corporate tax filings have added to Virginia's problem.

"If there is a sense here of some frustration, it's because these are tough times," said Del. Stephen C. Shannon (D-Fairfax). "The governor is making some recommendations that are tough, and we're either going to need to agree with them or we're going to need to make some difficult decisions."

Del. R. Steven Landes (R-Augusta) questioned the 5.4 percent cut to local governments, which already have economic problems.

"Why didn't you all put on hold some of the other initiatives . . . as opposed to going after the localities?" Landes asked. "I just don't understand the reasoning. . . . So, basically, the governor's new initiatives are more important than holding the localities harmless as much as possible."

Wagner told the committee that it was "virtually impossible" for Kaine to leave out localities when considering cuts. Such aid eats up almost half of the state's revenue.

"There's a point when you have a large deficit that you need to share the pain," she said.

Counties, cities and towns will help decide which cuts should be made to any number of services including law enforcement, libraries or health departments.

Mary Jo Fields, a lobbyist with the Virginia Municipal League, which represents 39 cities and 155 towns, said she is worried about how localities and school systems will come up with the money to make up for the cuts. "We have to keep delivering services," she said.

Fairfax County Board of Supervisors Chairman Gerald E. Connolly (D) said Wednesday that he was grateful that the cuts did not include K-12 education spending or tapping car tax-relief funds, but he said that the reductions come at a bad time. "Obviously, that's going to affect human services and public safety," he said.

In October, Kaine ordered a first round of cuts and layoffs to make up for what was then thought to be a $641 million shortfall in the current budget year, which ends June 30. The $1.39 billion gap announced Tuesday is on top of the $641 million.

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