Md., Va. Eye Even Deeper Cutbacks

Kaine has said for months he would not consider a tax increase.
Kaine has said for months he would not consider a tax increase. (Karin Cooper - AP)
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By John Wagner and Anita Kumar
Washington Post Staff Writers
Wednesday, December 17, 2008

The nation's ever-gloomier economic outlook is forcing Virginia and Maryland to make increasingly deep cuts in their state workforces and pushing both closer to more reductions in prized education and health-care programs.

In Virginia, Gov. Timothy M. Kaine (D) is expected today to propose the third round of layoffs of state employees in a year as well as a cigarette tax increase. With the elimination of 1,100 filled positions, the state will have shed about 2 percent of its employees in recent months.

In Maryland, Gov. Martin O'Malley (D) announced yesterday that he is requiring more than 67,000 state employees to take as many as five days of unpaid leave to relieve pressure on the current year's budget. O'Malley did not rule out layoffs in the coming year and acknowledged that it would be "mathematically impossible" to spare additional cuts to several of his priorities, given the growing budget challenges.

"We have to look at a lot of things we would otherwise not consider," he said. "What we have to brace ourselves for is there will be virtually no increases to anything and decreases to quite a number of things."

The grim outlook in both states has been blamed largely on an anemic economy that is severely undercutting anticipated collections of income and sales taxes as well as other key revenue sources.

Yesterday, a Maryland state panel almost doubled projected budget shortfalls that it forecast just three months ago for the current and coming fiscal years. Legislative analysts expect a $1.9 billion hole in the state's $14 billion general fund next year.

In Virginia, Kaine was preparing budget proposals in response to an estimated shortfall in the state's two-year, $77 billion budget that has grown to $3 billion in recent months, according to Robert Vaughn, staff director for the House Appropriations Committee.

Virginia is expected to take in less money this year than it did last year -- a phenomenon that has happened only twice in the past 40 years -- with budget cuts expected to affect almost every state agency. Revenue is still expected to increase in Maryland, but that is due largely to tax increases enacted last year.

It was unclear yesterday what departments would be affected by the 1,100 job eliminations Kaine will propose in Richmond today. In coming weeks, the Virginia Department of Transportation will start to reduce the number of employees by about 1,000. Vaughn said Kaine will also propose leaving 700 jobs vacant.

Legislators and General Assembly staff said that Kaine also plans to propose cuts to public education and health programs and to take additional money from the state's rainy day fund.

"We are all faced with truly, truly dreadful choices,'' Del. Kristen J. Amundson (D-Fairfax) said. "These aren't easy choices. Nobody is going to like doing any of these things."

In a state where tobacco has been almost sacred, House Speaker William J. Howell, the top Republican lawmaker, said a proposed increase in the state tax on cigarettes from 30 cents to 60 cents would be dead on arrival.

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