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Kaine Offers Major Shifts In Proposal To Cut Budget

By Tim Craig and Anita Kumar
Washington Post Staff Writers
Thursday, December 18, 2008

RICHMOND, Dec. 17 -- Gov. Timothy M. Kaine launched a budget-balancing proposal Wednesday that would transform the commonwealth's old-guard fiscal policies into ones that reflect the political conversion from red state to blue.

Many of the prescriptions to address a $2.9 billion budget shortfall that he unveiled would have been inconceivable 10 years ago. He proposed doubling the tax on tobacco in a state that once based its economy on cigarettes. He wants to offer early release to some prisoners doing time for nonviolent offenses in a state that trails only Texas in executions. And he has suggested taking steps to end Virginia's long history of housing the severely mentally ill in institutions.

"It strikes right at Old Virginia," Sen. Ken Cuccinelli II (R-Fairfax) said of Kaine's proposals.

Kaine (D) declared "Old Virginny is dead" after he helped President-elect Barack Obama carry the state in the November election. Analysts say he is embracing a strategy that would force Republican lawmakers to accept through legislative proposals and electoral defeats that the state has changed in lasting ways.

In offering his budget amendments to the House and Senate money committees Wednesday, Kaine set about guiding the state through an economic crisis that is likely to define his four-year term as governor. Virginia governors cannot run for reelection.

"We try to make cuts that position us better for the future rather than just find savings for today," Kaine said. "Wherever possible, we propose real, long-term savings."

Some of Kaine's proposals were painful but expected. State agencies, including colleges, would face 15 percent cuts. He proposed a $400 million cut to education funding and a $400 million cut to Medicaid, which helps cover medical needs for the indigent, elderly, blind and disabled.

But many of Kaine's budget moves were designed to spare programs he considers politically important. Many social service and environmental initiatives will be protected from deep cuts, while once-sacred constituencies could be hurt.

Kaine's 30-cent-a-pack increase in the cigarette tax will be debated in a state that was once home to thousands of tobacco farms and is still home to one of the world's largest cigarette makers, Richmond-based Philip Morris. Kaine said the proposed increase, which GOP lawmakers vow to derail, would prevent further cuts to Medicaid while discouraging smoking.

Kaine's most unorthodox budget proposal deals with reducing the prison population. Virginia is long known for its get-tough approach to crime. Under former governor George Allen (R), Virginia abolished parole in the 1990s.

Kaine said he hopes to provoke a statewide discussion about incarceration rates and, in the process, save money by releasing some offenders early. By giving the director of corrections authority to release nonviolent offenders 90 days before their sentences end, providing their behavior warrants it, the governor estimates the state would find considerable savings. The director has the authority to release a prisoner a month early.

"I am not proposing this to be controversial. I am proposing this to be smart," Kaine said.

The governor said he also wants to "slow the growth" in the prison population by making it harder for someone on probation to be jailed for a "technical violation" of a sentence, such as missing an appointment with a probation officer.

"All of a sudden, it seems like it's a 180 from the George Allen years," said J. Scott Leake, a senior adviser to the Senate Republican Caucus. "It's a sea change in attitude."

Another cost-cutting measure could transform how the state is viewed in caring for the mentally ill. Kaine proposed closing the last state-operated mental health hospital for children. Virginia had a national reputation in the 1970s and 1980s for its housing of the mentally ill in institutions.

Kaine said he wants to direct more resources to community-based programs, which mental health advocates say are underused in the state. Kaine also wants to close a mental health facility for adults, the South Eastern Virginia Training Center. That move would reduce the number of institutionalized Virginians by almost one-third.

"Compared to other states, we are dinosaurs in this, and the only way to do it right is by funding more community care options," Kaine said.

Kaine has found an ally in GOP legislators in his efforts to reform the mental health system but expects a bitter fight over other parts of his agenda in the Republican-controlled House of Delegates. The House has been a graveyard for many of Kaine's initiatives, including a tax increase to pay for road construction, a ban on smoking in restaurants and bars, and a proposal to require background checks for all gun buyers at gun shows.

But Kaine has used those Republican positions as political ammunition against them. The tactic has been particularly effective in Northern Virginia, where Democrats have seen their most significant political gains.

Republicans contend that Virginia has not changed that dramatically.

House Majority Leader H. Morgan Griffith (R-Salem) immediately challenged Kaine's prison early-release plan, saying it would reward drug offenders. House Speaker William J. Howell (R-Stafford) has already attacked Kaine's cigarette tax increase.

U.S. Rep. Eric Cantor (R-Va.), the incoming House minority whip, called the tax "nothing but an assault" on Altria, the parent company of Philip Morris and one of the world's largest tobacco corporations. More than 5,000 Virginians work for Altria.

Kaine said that even with the increase, Virginia's cigarette tax would be half of the national average of $1.20 a pack. And by putting the cigarette tax on the table, Kaine said, he would force the GOP to choose between approving it or slashing an additional $150 million from Medicaid.

Wednesday's round of proposed cuts was the fourth in a little more than a year and, by far, the most severe. Almost $2 billion has been trimmed in the past year.

Kaine proposed using $490 million from the state's rainy day fund, the largest withdrawal in its history and the second withdrawal in a row. Last year, the state borrowed more than $300 million from the fund.

About 1,100 workers from agencies across the state, primarily in health and public safety, would be laid off in the next two years. The Department of Transportation would reduce its workforce by 1,500 to 1,700 employees. Employees would not receive raises. Most state agencies would face 15 percent cuts, while community colleges would be trimmed by 10 percent and public safety agencies by 7 percent.

House Republican leaders predict even deeper cuts. Griffith said he worries that Kaine underestimated the shortfall so he could avoid slashing further. Republican leaders anticipate that the shortfall could reach $3.5 billion to $4 billion next year.

"No one likes to be the bad guy in this situation. The governor certainly made some tough decisions," Griffith said. "I think he needed to make about an additional $600 million worth of tough decisions."

Staff writer Chris L. Jenkins contributed to this report.

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