The slowdown in the housing market is having more of an impact on the commonwealth's revenue collection than previously thought, Democratic Gov. Timothy M. Kaine announced Tuesday.
From a press release from Kaine's office:
The shortfall for the remainder of fiscal year 2008 and fiscal years 2009 and 2010 totals nearly $1.4 billion.
The Governor’s proposed strategy to meet the shortfall includes increased utilization of the Revenue Stabilization Fund; targeted reductions to the Governor’s initiatives and other programs; percentage cuts to executive agencies; and bonding of capital projects. While the plan does include some targeted reductions in K-12 education and percentage cuts to some local aid, it does not reduce funding for the constitutionally required Standards of Quality program in K-12 education. The Governor’s plan does not include tax increases.
“Since the November 2007 revenue forecast, the national economy has dramatically slowed,” Governor Kaine said. “While Virginia can weather economic downturns better than most states, we are not immune. In the past week, we have gathered the most recent data and met with our leading economists, representatives of the private sector, and state legislators. The revised consensus revenue forecast indicates that we are now facing an additional shortfall of nearly $1.4 billion over the remainder of fiscal year 2008 and the 2009-2010 biennium.”
The revenue shortfall for the remainder of this fiscal year is projected to be $339 million. It is expected to be $520 million in fiscal 2009 and $532 million in fiscal 2010.
“My recommended revisions include an additional withdrawal from the Revenue Stabilization Fund, targeted reductions in spending, and percentage cuts to executive branch agencies,” Governor Kaine said. “We sought to minimize the impact of the cuts on services and balance the burden of the cuts, keeping in mind that some agencies made bigger reductions in the first round of cuts we made in October.”
Read the rest of Kaine's press statement here, and his budget reduction plan here.
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