Thursday, February 18, 2010




Associated Press

Gov. Bob McDonnell pauses while giving details of his proposed budget cuts during a press conference in Richmond this morning. In the background is Virginia Secretary of Finance Richard D. Brown.


Highlights of Gov. Bob McDonnell's proposed budget cuts and spending announced Wednesday, grouped by area of the budget and by cost. (Figures rounded to the nearest million):

Public Education

$225 million from restoring base funding for public schools to 2008 level.
$130 million cut from support for supplemental salaries such as coaches and department chairs.
$92 million from eliminating Lottery support for some education programs.
$32 million cut for lease and rental support.
$30 million in travel funding cut.
$19 million saved by extending the useful life of school buses from 12 years to 15.

Public Safety
$6 million in reductions to judicial system operating costs.
$1.3 million in cuts to court-appointed attorney waiver program.
$4.7 million in cuts for inmate medical costs.

Employee Compensation
$180 million from five furloughs annually for state employees except essential public safety personnel.
$611 million in retirement system savings, particularly requiring new hires to pay part of their retirement plan contributions.
$82 million spent to give employees a 3 percent bonus in December 2011.
$115 million spent to relieve current state workers from the burden of paying part of their own retirement.

Health and Human Resources
$63 million in cuts to consumer-directed Medicaid services.
$53 million saved by tightening eligibility for Medicaid long term care.
$34 million cut by freezing enrollment in FAMIS, a government-subsidized children's health insurance program.
$28 million in cuts to Medicaid provider reimbursements.
$11 million from eliminating a one-time expansion in spending for Temporary Aid to Needy Families.
$9 million earned from selling the Commonwealth Center for Children and Adolescents, an acute care mental health center.
$5 million in cuts to local Social Services Department offices.
$5 million from cutting adult components of the state general relief program.
$4 million from reducing funding for the unemployed parents cash assistance program.
$2 million cut for dental services.
$2 million cut to the Virginia Health Care Foundation.
$2 million cut from child advocacy centers.
$2 million cut by eliminating general fund support for local domestic violence grants.
$2 million in cuts to the Virginia Association of Free Clinics.
$1 million in cuts to the Teen Pregnancy Prevention Initiative.
Commerce and Trade
$6 million in reduced funding for homeless programs.
$300,000 cut from eliminating funding for mortgage assistance counseling.
Higher Education
$20 million in tuition assistance grant program reductions.
$7 million in Eminent Scholars Program cuts.

General Government
$50 million reduction in aid to localities.
$40 eliminated deposit into the Revenue Stabilization (or rainy day) Fund.
$21 million the state collected from the December state tax amnesty program.

Source: Office of the Governor


Virginia Civic Engagement Coalition Responds to Governor’s Budget Projection

For Immediate Release
February 17th, 2010
Contact: Jenny Lawson 571-482-9026,

Virginia Civic Engagement Coalition Responds to Governor’s Budget Projection
Coalition of faith, environmental, middle class, low-income, students and people of color

Richmond, VA - At a press conference this morning, the Governor announced that state revenue collections plunged by 6.5 percent in January, while repeating his commitment to not raising taxes. Instead, he has proposed further cuts to education, health and human services and changing the state retirement system. As a result lawmakers have an even bigger hole to fill in the budget.

The coalition takes issue with the Governor's stance that the only solution to our current budget crunch is deeper cuts in programs and services. The organizations are advocating for a balanced approach that includes both cuts and responsible revenue options to bring more dollars into the Commonwealth to pay for essential services.
“Our policy makers have choices when it comes to the way we spend money and how we bring it in. The future of our Commonwealth is directly connected to how we deal with our current economic crisis. A balanced approach is critical to making sure that we are prepared for the future and emerge from this recession stronger,” said J.R. Tolbert from Environment Virginia. “It is irresponsible to eliminate options from our toolbox when we need creative solutions to our economic problems.”

"The Governor wants to cut health coverage for 30,000 uninsured children and restrict community based services to the elderly and disabled, forcing them into nursing homes. Overall cuts to health programs would forfeit hundreds of millions of federal dollars that support health related jobs and economic activity all around Virginia" said Jill Hanken from the Virginia Poverty Law Center.

"While not unexpected, these cuts and the approach to fiscal policy they represent are emblematic of missing leadership, a disregard for poor and middle income Virginians and bad economics. The pledge to raise no taxes will only mean that we get higher taxes elsewhere and in other forms like higher local property taxes, increased fines and fees and tolls," said David Shreve of the Virginia Organizing Project Tax Reform Committee, "At a time when we ought to have policy that helps to generate jobs, further cuts will only stifle the economy and create negative ripple effects that go well beyond state government and the state's public sector."

"Curiously, the Governor's saving grace seems to be an unexpected $200 Million in corporate income tax receipts, the very ones he attempted to end earlier in the session by advocating for the end of the corporate income tax. It is a confusing time in Richmond where the interests of corporations are overwhelming those of every day Virginians in the minds of too many of our elected officials. We need leadership to emerge, but to date it simply hasn't." said Reverend C Douglas Smith from Virginia Interfaith Center on Public Policy

Coalition members include: Virginia Organizing Project, Environment Virginia, Virginia Interfaith Center on Public Policy, Voice of Vietnamese Americans, Virginia Association of Personal Care Assistants, Virginia Poverty Law Center, SEIU Local 5

Jenny Lawson
Virginia Civic Engagement Table


Gov. McDonnell unveils deep budget cuts, acknowledges they'll hurt
His suggestions include nearly $730 million in reductions to K-12 education and as many as 10 unpaid furlough days for state workers. The Republican governor, who ruled out any tax boosts before he took office in January, sent shock waves across the General Assembly, struggling with its own budget plans.By Julian Walker (The Virginian-Pilot) and Michael Sluss (The Roanoke Times)

RICHMOND -- Gov. Bob McDonnell went public Wednesday with his recommendations for $2.1 billion in spending cuts that he called "the most difficult decisions I’ve had to make in public life."

His suggestions include nearly $730 million in reductions to K-12 education, freezing enrollment in a health insurance program for low-income children and pregnant women, and requiring state workers to take as many as 10 unpaid days off and contribute more toward their pensions.

"There’s no doubt in my mind it will cause hardship for real Virginians,” McDonnell said. But he maintained his campaign pledge not to raise any taxes.

REACTION from the General Assembly
House Majority Leader Morgan Griffith, R-Salem, said McDonnell's recommendations were welcome.

"We all are going to have a lot of tough decisions," Griffith said. "Ours may not be the same tough decisions the governor makes, but we're all trying to get to the best budget we can get with the money we have and all ideas are welcome."

[ More reaction: Griffith defends McDonnell's decision to lift a proposed freeze on adjusting the state's local composite index school funding formula.]

Sen. Janet Howell, D-Fairfax County, a member of the Senate's budget negotiating team, said of McDonnell's cuts: "Every one of these is cutting the heart and soul out of state government."

Howell said the governor's proposal to eliminate funding for a school breakfast program for low-income children was "the most tragic."

Sen. John Edwards, D-Roanoke, called McDonnell's proposal "a political tsunami."

"It's the biggest jobs-cutting budget I've ever seen," Edwards said. "When people find out the number of teachers that will have to be let go ... the number of health care workers that will be let go ... the number of services that will be cut, they will be outraged."

"The shame of it is, it's unnecessary," said Edwards, who said lawmakers could cushion the severity of the cuts by rolling back car tax relief subsidies as Kaine proposed.

House Appropriations Committee Chairman Lacey Putney, I-Bedford, said McDonnell's recommendations "are pretty much in line" with the blueprint being hammered out by the House budget-writing panel.

But, Putney said, "I don't find much appetite on the House side for using furloughs for state employees."

Putney said members have concerns about how the furloughs will be implemented, particularly in state hospitals and corrections facilities.

Senate Democrats are divided over whether to propose a balanced budget that relies entirely on cuts, but Howell said the Finance Committee will produce a plan by its Sunday deadline.
[Could McDonnell's budget ax help presidential ambitions? Comment on Dan Casey's blog.]

K-12 EDUCATION: "They're throwing the children in Virginia's poorest localities under the bus," says Virginia Education Association lobbyist

The Associated Press on Tuesday obtained a four-page summary assembled by a legislative budget writing committee from briefings senior McDonnell budget advisers gave to committee members and staffs.

It is the most detailed accounting yet of the administration's priorities in attempting to reconcile a $4 billion revenue shortfall for state budgets through 2012, and provides the first clear picture of who will suffer the most from McDonnell's proposed cuts.

The document shows that McDonnell wants to cut $730 million in state support to local schools from kindergarten through high school.

The largest bite comes from resetting the funding base to that used in fiscal year 2006, a two-year reduction totaling $225 million. Other cuts to education include $130 million from removing state salary supplements for sports coaches and department chairs, nearly $92 million from eliminating initiatives such as Mentor Teacher and school breakfast programs and nearly $20 million in savings from extending the work lives of school buses.

House Majority Leader Morgan Griffith, R-Salem, defended McDonnell's decision to lift a proposed freeze on adjusting the state's local composite index school funding formula. The composite index measures a locality's ability to pay for its public schools, and Kaine had proposed delaying an adjustment to the formula in his December budget. Lifting the freeze will steer more money to Northern Virginia at the expense of other localities, but Griffith said the governor is right to propose the change.

"If we start saying when it benefits another region of the state that we don't like it, then in a couple of years they may do away with it and we'll be getting the short end of the stick," Griffith said. "It's helped us for 30 years. It hurts us this year. But I suspect it will help us for 30 years in the future, and messing with it and playing games with it in a single year is foolish."

Virginia Education Association lobbyist Robley Jones said McDonnell's overall education cuts will have a disproportionate effect on poor and rural localities that are less able to make up the difference.

"They're throwing the children in Virginia's poorest localities under the bus," Jones said.

Virginia School Boards Association executive director Frank Barham warned that if the cuts are incorporated by legislators, schools would have to lay off tens of thousands of teachers, raise class sizes and cut programs.

Proposals include up to five unpaid furlough days annually

McDonnell plans even deeper reductions — nearly $925 million — from compensation and benefits to state employees.

That includes requiring state employees to take up to five unpaid furlough days off each of the next two years. State workers have already been put on notice that pay raises are out and that some will be expected to fund more of their retirement plans.

Read an e-mail Gov. McDonnell sent to state employees outlining his budget proposals [PDF, 20KB]

HEALTH AND WELFARE safety net programs, including those that aid the homeless and prevent teen pregnancies

The new Republican governor, just one month in office, also recommends nearly $300 million in cuts to Health and Human Resources programs, the legislative summary says. Some of those programs are a lifeline to the state's poorest residents.

Within the Department of Social Services, for example, McDonnell has suggested eliminating general fund support for nine programs outright, including $1.2 million for homeless assistance programs, $700,000 for domestic violence services, $4.8 million in child support supplements and $3.6 million for the state Healthy Families initiative.

From the Department of Health, McDonnell's lieutenants have suggested eliminating nearly $1 million from a teen pregnancy prevention program, cutting $1.8 million for the Virginia Association of Free Clinics, trimming $2.2 million from the Virginia Health Care Foundation and eliminating local health department dental care services.

McDonnell's first news conference on the state's budget crisis comes one day after a monthly report from Finance Secretary Richard D. Brown showing a 6.5 percent drop in January revenues. The state is seven months into the current fiscal year and revenue collections are already 4.7 percent behind what they were for the same period last year. The fiscal year ends on June 30.

For more details, return to later today and read tomorrow's Roanoke Times.

The Associated Press contributed to this report.


Articles post McDonnell speech 2.18.10

Times-Dispatch Staff Writers
 Gov. Bob McDonnell wants to fill a $2 billion budget shortfall by eliminating more than 500 jobs over three years, instituting 10 furlough days for state workers and slashing services for children and the sick.
 But he proposes no new taxes, and he is electing to keep the $950 million-a-year car-tax break for localities.
 Schools and health care take heavy hits under McDonnell's plan, with reductions of $731 million to public education over the two-year budget period, and more than $300 million to health-care programs.
 He's proposed $50 million in new spending for tax credits and incentives.
 The 10-day furlough plan, designed to save $181 million over the two years beginning July 1, did not sit well with fellow Republicans. Del. Lacey E. Putney, I-Bedford, chairman of the Appropriations Committee, said "I'm not sure there is much of an appetite for furloughs." He said they would be hard to manage.

The Washington Post Blog

 McDonnell is proposing deep cuts to core services in K-12 education and health and human services.
 The K-12 reductions would loosen the state's basic educational standards while reducing funds for support staff, supplemental salaries for coaches and health insurance for teachers. The health cuts would reduce mental-health treatment beds by 232, take 5 percent in funds from community service boards that offer substance abuse and mental health treatment programs, and freeze enrollment for a program that provides insurance to low-income children. Other proposed cuts include five unpaid days off annually for state workers, closing five state parks, including Mason Neck in Fairfax County, and slashing programs that aid the homeless and prevent teen pregnancies.

Times-Dispatch Staff Writers
 Parents worry there will be no place for the suicidal kids
 Advocates fear that children from poor families will have no health insurance and that their parents won't be able to turn to free clinics or health centers for care.
 They worry that the elderly and disabled, the developmentally impaired, people with HIV or AIDS may not be able to get in-home care or respite for their families.

The Virginian-Pilot
 McDonnell's suggestions show "an absolute disregard in investments for our future, while... his spending demonstrates an appetite for more corporate takeover in Richmond," said Doug Smith, executive director of the Virginia Interfaith Center for Public Policy.
 By proposing those cuts while asking the legislature to approve tens of millions in funding to attract business to Virginia with incentives and tax credits, "Bob McDonnell is choosing business over people in this budget," Smith argued.
 Particularly upsetting to state Sen. Louise Lucas, D-Portsmouth, is the possible cut to a school meals program.
 What wasn't immediately clear is whether McDonnell's cuts will be a framework for his future budget plans or are simply a response to current economic conditions.

Jeff E. Schapiro
Times-Dispatch Staff Writer
 Lawmakers are divided over Gov. Bob McDonnell's proposal to save state jobs by forcing those who have them to take 10 days of unpaid vacation over the next two years.
 But Del. Dave Nutter, R-Montgomery, an administrator at Virginia Tech, said savings from furloughs -- McDonnell estimates $181 million -- might be difficult to achieve because of the disparate responsibilities of employees and how they are paid.
 House Appropriations Committee Chairman Lacey E. Putney, I-Bedford, said his panel's version of the state budget is not expected to include savings from furloughs. However, the Senate draft is likely to embrace them, said Senate Finance Committee Chairman Charles J. Colgan, D-Prince William.

The Daily Press
 Gov. Bob McDonnell grabbed hold of the budget ax Wednesday, proposing $2.1 billion in state spending cuts that fall heavily on public schools, health care and state worker compensation.
 Public education advocates said McDonnell's cuts would mean 28,500 layoffs at schools, hitting teachers and support staffers.
 On health care, McDonnell would freeze enrollment in FAMIS, keep an estimated 28,500 individuals from joining a program that helps cover medical care for low-income children and pregnant women.
 Sen. Mamie Locke, D-Hampton, "The Senate is going to look for ways to generate revenue," Locke said. "All 140 of us know that cuts have to be made, but is that the only thing we do?"
 Sen. John Miller, D-Newport News, "People are just starting to realize the impact of $4 billion in cuts," Miller said. "I am for the first time hearing from people who want to find a way to increase revenue so these aren't as deep."

The Daily Press
 The governor's office hasn't released figures on how the cuts would hit localities, making it hard for city and county officials to gauge the impact.
 Local agencies say they are particularly worried about the cuts to prevention programs, such as Healthy Families. That program aims to stop the cycle of destructive behaviors, such as child abuse and neglect, with in-home counseling for families.
 Cuts in funding for law enforcement appear to be still in the governor's budget. A 20 percent reduction would equate to a $1.4 million cut to law enforcement in Hampton.

By Aaron C. Davis
Washington Post Staff Writer
Thursday, February 18, 2010; A01
 Virginia Gov. Robert F. McDonnell (R) has gone so far as to declare that his plans will create 29,300 jobs in the next two years, although thousands would come from initiatives that haven't worked elsewhere.
 McDonnell, for example, has predicted that with a fraction of the state's likely share of the federal stimulus money, his administration will produce six times as many jobs as the Congressional Budget Office says are likely for Virginia under the jobs package that the Senate is expected to vote on next week.
 Even if their plans work as advertised, state numbers show that the tax subsidies O'Malley and McDonnell would give to businesses for hiring unemployed workers would max out after adding fewer than 13,000 workers to the 7 million-person workforce of Virginia and Maryland. That's less than one-seventh of the 99,000 jobs the two states lost over the past year.
 Less than a third of the 29,300 jobs that his administration says it can create in the next two years, however, would come from such big-ticket employers, which can often take several years to move or open facilities.
 His plan assumes that $2 million to set up marketing offices to promote Virginia in China, India and the United Kingdom will net 1,300 direct jobs in Virginia and 700 related jobs for state residents within two years. Many states, including California, have recently closed overseas offices because they concluded the sites weren't paying off.

The Virginian Pilot

By: William C. Flook
Examiner Staff Writer
 Virginia Gov. Bob McDonnell on Wednesday announced vast cuts to K-12 education, health care, and employee pay and benefits, heaping on top of already painful budget reductions proposed by his predecessor.
 Other cuts; Closing five state parks,Reducing funds for child and adult dental programs, Eliminate funding for teen pregnancy programs, Remove proposed increase for inmate medical costs, Pull funding for homelessness programs

The Free-Lance Star
 Gov. Bob McDonnell announced proposals yesterday to cut $2.3 billion from the state budget, in part by shaving another $730 million off schools funding and $316 million from public health services.
 Republicans immediately denounced the tax increases as a non-starter. Since then, lawmakers have been talking about how to cut that other $2 billion from the budget, even as interest groups such as sheriffs, teachers and advocates for the disabled have decried the first $2 billion in proposed cuts as devastating to their programs.
 "At least now the public can see the governor's proposals to cut the budget to maintain his no-tax pledge," Houck said.

By Bill Bartel
The Virginian-Pilot
 Most of the nation's state-run public employee pension systems, including Virginia's, are headed for financial crises that could mean higher taxes or cuts in state services unless changes are made, a new study warns.
 the Pew report was critical of Virginia's pension system because it was short $10.7 billion of the $65 billion needed.
 The pension program needs annual payments equal to 11.6 percent of state employee payrolls and 15.5 percent of teacher payrolls to keep them from sliding farther behind, Chenault said. The budget proposals would bring the payments to 8 percent and 10.3 percent, respectively, she said.

The Richmond Times Dispatch Editorial
 Yesterday McDonnell identified the four priorities guiding his budget policies: (1) jobs creation, (2) the maintenance of the state's AAA bond rating, (3) the preservation of core services, particularly higher education and public safety -- two areas that have taken hits in recent years, and (4) a budget adopted on time with no "general tax increases."
 While we share McDonnell's aversion to general tax hikes, we would welcome a modest increase in the state's gasoline tax, which at rates that have not changed since the Model T does not generate the revenue necessary for an efficient transportation system.

The Virginian-Pilot Editorial
 By waiting until four days before legislators are scheduled to release their own plans, McDonnell has accommodated no one.
 The governor wants to protect colleges and law enforcement from cuts because they were hit harder in previous reductions. There's logic in his reasoning, but he has yet to make a case why public schools and health care programs are better targets
 But the governor's brand of innovation was to substantially dump state obligations onto local governments. They, in turn, will have no one to turn to but their homeowners and the property taxes they pay.

David Squires
Urban Affairs
The Daily Press
 Predictably, the cuts will most affect individuals and institutions that can least afford it: the poor. The elderly. School children. Pregnant teens
 In Hampton Roads, that can translate into larger classrooms and empty bellies for some students who eat free breakfasts at school.
 And who will stop the mad ravings of a governor who predicts that a still developing movie industry will be Virginia's financial fix?

By Cathy Grimes
The Daily Press
 For Newport News, McDonnell's proposals might decrease state funding by $20 million, said Assistant Superintendent Mary Lou Roaseau. Newport News also will see less state help for its low-income and educationally at-risk students and lose about $94,000 for its breakfast program.
 In Isle of Wight, the cuts might pare another $1 million from the school district's budget, Superintendent Michael W. McPherson said. His district already had planned for $1.5 million, or 5 percent, less state support for its proposed $59.1 million budget. Isle of Wight stands to lose more than $3,700 for its breakfast programs.
 Officials in Poquoson, Hampton and other districts said they were waiting to see what the state House and Senate propose in their budgets, scheduled for release on Sunday.

The Danville Register & Bee
 “It’s disheartening to know that we are looking at getting fewer state dollars than we anticipated,” Pittsylvania County Superintendent James McDaniel said. “The scope of that potential cut is yet to be determined.”
 “These cuts are devastating to our budget,” Danville Superintendent Sue Davis said. “Some of those (funds) are supplemented locally. The final impact of any budget recommendations that (McDonnell) makes will be dependent on the legislature … We just do not know what impact that would have on us.”


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