RICHMOND, JAN. 9 -- Gov. L. Douglas Wilder, saying that Virginia faces one of the most severe budget crunches in the nation, asked the General Assembly tonight for broad new authority to combat the economic downturn, including the power to order temporary furloughs of the 100,000 state workers if the economy worsens.
In his second State of the Commonwealth address since his historic election in 1989, Wilder sought to assure a statewide television audience that he will "not permit the enormity of today's economic challenges to blind us to the opportunities for progress that still exist."
Nonetheless, Wilder announced nearly $200 million in new cuts in the state's two-year budget, bringing the total cuts to $2 billion out of spending requests that originally totaled $26 billion.
Not once in the 35-minute address was the governor interrupted by applause, but Wilder said afterward that he wasn't surprised. "It's bad news that you bring. People don't applaud bad news," he said.
Because Wilder failed to mention the threatened layoffs in his speech -- choosing to disclose that bit of bad news in written documents -- Sen. Joseph V. Gartlan Jr. (D-Mount Vernon) predicted that the prospect would hit state workers like "a bolt out of the blue."
Wilder, who spent much of his first year in office traveling the nation, raising his profile as a fiscal conservative and attacking President Bush, kept up the fusillade tonight, promising that "the irresponsible fiscal fantasies of Washington will not take root in Virginia."
Wilder asked fellow Democrats who have urged him to consider raising taxes to avoid cuts or pay for new programs, "Who do you want to tax, and how many billions do you want to borrow to pay for all those promises?"
Del. Robert E. Harris (R-Fairfax) said polls he has conducted in his district -- all 140 legislative seats are up for election in November -- showed "overwhelming support" for Wilder's approach of spending cuts instead of tax increases.
Despite the planned cuts, Wilder said he will insist on retaining a $200 million rainy-day reserve, in case the economy continues to worsen, and repeated his view that there is no need for a tax increase.
Frustration about the bleak fiscal picture prompted the Senate, meeting before the governor's speech, to vote 21 to 19 to add an extra day to the six-week session to give legislators more time to digest the final budget compromise that will emerge from a conference of six senior lawmakers. Critics said the cost of an extra day, $68,000, isn't worth it. The House will vote on the proposal Thursday.
Despite the austere tone of his message tonight, Wilder indicated his willingess to sell bonds to support needed programs, especially for school construction.
As a start, he wants to allow the Virginia Public School Authority to issue $162 million in bonds to eliminate a backlog of school construction in poorer areas. Wilder said he might support asking voters next year if they want to go into debt through bonds for other projects, though he ruled that out this year.
James C. Miller, a Republican who served as director of the Office of Management and Budget for President Reagan, commented on a Richmond television station that a reliance on bonds "sounds like deficit financing to me."
Wilder, whose own early education came in inferior, segregated schools here, repeated his desire to see an equalizing of opportunity in education for the state's children. "Circumstances of birth play far too great a role in determining whether all children get the education needed to develop their potential," he said.
But in an apparent attempt to soothe concerns in wealthy Northern Virginia school districts, Wilder promised that he will "oppose any attempts to shift massive funds from well-off to less-affluent school systems."
The disparity should be addressed, instead, by "making steady progress to raise the quality of the least-funded schools," he said.
In a move sure to disappoint Northern Virginia legislators, Wilder proposed that unspent money from the Route 58 highway project across the southern part of the state be used to soften the budget shortfall. Local lawmakers had hoped the money would be used to make up for what they claim was a promise broken last year that would have given local governments some of the fees paid for real estate filings. Those fees would have produced $40 million a year for local governments, about half of it going to Northern Virginia.
Among the governor's other budget proposals that would affect Northern Virginia:$3.5 million would go to Prince William County and about $50,000 to Loudoun County under a 1989 state commitment to pay for 50 percent of the cost of jail construction. $800,000 would be cut from equipment purchases and library materials for George Mason University. An additional $13.7 million for equipment and library materials would be cut from Virginia's community college system, the largest school of which is Northern Virginia Community College. About 50 positions needed for the extension of the Dulles Toll Road will be provided from personnel reductions in other areas of the Virginia Department of Transportation. The Northern Virginia and Staunton regional health offices would be consolidated, and a $1.4 million program to obtain psychiatric care from private institutions in Northern Virginia would be deferred.
In addition to the cuts, Wilder said, emergencies require him to seek $180 million in new spending, part of which is mandated by changes in the federal funding of Medicaid.
"The driving force behind the increase, however, is the downturn in the state's economy," according to a budget document.
In the last year, the number of people who qualify for Medicaid increased by 15 percent, to 331,920, and the number eligible for Aid to Dependent Children also grew by 15 percent, with an average of 156,000 recipients expected by next year.
Despite all the cuts, the revised budget still contemplates spending $674 million more in general fund revenue (taxes collected primarily on individual and corporate incomes and on retail sales) than in the preceding biennium.
Although that is an increase of 5.8 percent, state budget analysts say it is less than the rate of inflation, and the smallest growth in actual dollars since 1974-76. For the next two years, general fund revenue is predicted to grow at the lowest rate since World War II.
The state lottery will play a major role in easing the pain of the budget crunch, accounting for slightly more than one-quarter of the $2 billion needed to bridge the gap between spending requests and authorizations.
State Finance Secretary Paul W. Timmreck said Wilder's request for authority to order layoffs of state workers for up to six days would be invoked only if the economy hasn't begun to show signs of a turnaround by the middle of the year.
Timmreck defended that approach, noting that "auto plants lay off workers all the time."
Timmreck said the current proposal anticipates both furloughs and reducing agency budgets by 3 percent more -- for a total budget cut of 18 percent for some agencies -- for the fiscal year beginning July 1.
Wilder also wants lawmakers to allow the Virginia Retirement System to buy the state's shares in the RF&P Railroad at the current value of $34.50 a share, which would result in a profit of $22.5 million, a one-time windfall for the state.
The action also would place complete control of the valuable railroad stock in the hands of the retirement system board, which Wilder controls. Currently, any sale of RF&P stock by the retirement system must be approved by the legislature.
Gartlan, a senior member of the Senate Finance Committee, called the idea of selling the RF&P stock "crazy . . . . I can't conceive that we would approve a further transfer of power to the executive."
Staff writer John Ward Anderson contributed to this story.