Va. might have to cut $2.9 billion more by '12

Financial crisis prompts 'scary' budget forecast for state agencies

RICHMOND -- State agencies might need to cut up to $2.9 billion more from core services, such as education, law enforcement and health care, by mid-2012 to accommodate Virginia's financial crisis.

The bleak forecast announced Tuesday at a House Appropriations Committee retreat comes on top of nearly $7 billion in reductions to the state's current two-year budget since last year.

"These budget numbers are scary, and they're stark," Del. Clarence E. "Bud" Phillips (D-Dickenson) said. "They're going to have a grave impact on the citizens of the commonwealth."

The forecast reflects a $300 million shortfall in this fiscal year and a $2.6 billion shortfall over the next two fiscal years. The numbers are based on the state receiving less tax revenue than it had anticipated and being required to spend additional money on certain mandatory programs, such as Medicaid.

Gov. Timothy M. Kaine (D) will introduce his proposed two-year budget in December, a month before he leaves office. The General Assembly and the incoming governor, Republican Robert F. McDonnell, will use that as a blueprint but will make changes based on their priorities and the economic forecast.

"The governor-elect will take office during the most difficult fiscal situation our commonwealth has faced in decades," McDonnell spokesman Tucker Martin said. "These are challenging times, and today's budget projections are further proof of that fact."

In September, Kaine announced that he would eliminate nearly 1,000 jobs, close three correctional facilities, and cut 15 percent in aid to colleges and universities.

Legislators and their staffs said Tuesday possible savings could include reducing all state agency budgets by 15 percent, cutting programs such as the pre-kindergarten initiative and capping the number of support staff members and aides that schools can hire.

"The fat's pretty much gone," said House Majority Whip M. Kirkland Cox (R-Colonial Heights). "I think you have to look at a whole host of options. They're tough options."