Local Commentary

News from the Coffin Corner: Delegate Hull’s Richmond Report




Revenues Down, But Not Out

I was in Richmond on Tuesday to hear Governor Tim Kaine speak to a business group about the state budget and federal issues.

Budget cuts are the biggest issue that the General Assembly faces during the upcoming General Assembly session.

Governor Kaine already took steps to cut about $1 billion from the budget for the fiscal year that ended on July 1.

He said at that time that we could expect additional cuts of up to $2-1/2 billion to the fiscal year 2009 budget.

Since then, the Office of Planning and Budget has estimated that revenues have fallen an additional $250 million.

While withholding tax revenue has been flat – which is pretty good, corporate tax revenue has dropped, and sales taxes have taken a nose dive.

Sharp reductions in sales taxes and real estate taxes have also been seen in all Northern Virginia local governments.

But, there is still small job growth in Northern Virginia and Hampton Roads. Most of the state is stable, but Central Virginia has lost jobs.

Governor Prepares for Cuts

The Governor said that while there will be budget cuts, he will also propose some increases in spending for long term programs.

These include increased college tuition assistance because Virginia was recently given a grade of “F” on college affordability.

He has also been interested in expanding pre-kindergarten programs and I expect that this will continue.

Of course, that would mean that other programs must be cut even deeper. He said several weeks ago that there will be cuts in education, too.

He spared public education from cuts this summer, but he said that he will propose that all school divisions reduce administrative overhead expenses.

One area where he said that he is working on producing efficiencies is in energy use and conservation in state facilities.

Governor Kaine said that we cannot preach conservation to Virginians if the state government does not also practice it.

His feeling is that is not only good from a symbolic sense, but that it will reduce base electrical load statewide.

Presidential Advisor

The Governor said that he traveled to Philadelphia last week for the National Governor’s Association meeting with President-elect Obama.

He said that he strongly supported the need for a new stimulus package for infrastructure expenditures.

Not only is spending for transportation projects needed, he said, but laying broadband through states is also important.

But, he reported that he advised against any aid to states to help with their deficits because states need to better manage their budgets.

Governor Kaine added that he advised Mr. Obama throughout the campaign on economic matters.

He said that he focused on the impact of federal policies on small businesses and that he pushed for providing tax relief to them.

He said that he advocated eliminating capital gains taxes for small businesses and giving them health care tax breaks.

ItIs All About Jobs

We clearly need new jobs in this country and I firmly believe that this federal infrastructure package is the right prescription for that.

Such expenditures mean payrolls for contractors, subcontractors, and suppliers, and that money churns through the economy.

Not only that, but you have something to show at the end, like a new bridge or road or rail line.

I know that Virginians are hopeful that both Governor Kaine and President Obama succeed as they lead us through tough times.

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