Kaine to unveil budget shortfall plan

Virginia Gov. Timothy Kaine is expected to announce today the size of Virginia’s budget shortfall and his proposed cuts to deal with it.

Two Democratic lawmakers said the governor will offer a proposal to cover a $2.9 billion shortfall through 2010. The plan will include 1,500 state layoffs, a 30-cent increase in the state cigarette tax, $400 million in cuts in health care and public education and the use of $500 million from the state’s rainy day fund.

House Speaker Bill Howell and U.S. Rep. Eric Cantor of Virginia criticized the cigarette tax increase, calling it “a job killer.”

The two legislators said the tax increase would damage Phillip Morris, which has a large manufacturing complex in Richmond.

Howell said a cigarette tax increase from 30 cents to 60 cents per pack could spur Virginians to go across state lines to North Carolina to buy their tobacco.

Sen. Emmett Hanger, R-Mount Solon, a member of the Senate Finance Committee, is anxious to hear Kaine’s proposal in Richmond today.

Hanger said legislators have discussed ways to help school districts and local governments deal with the expected cuts.

He said one possibility is to relax state mandates for schools under the state Standards of Quality until the economy recovers.

“We can’t shift the burden to local governments and expect them to take it up. We must work with local governments,’’ he said.

Del. Ben Cline, R-Rockbridge, said he is prepared for the tight times. “This will take some real belt-tightening to bring the budget back in balance. We have to be prepared for that,’’ he said.

As of now, Kaine and Virginia legislators have differing views on the amount of the shortfall.

While Kaine’s estimates are less than $3 billion, the House Appropriations Committee has estimated $3.5 billion and the Senate Finance Committee $3.2 billion.

The legislators need to reach some kind of agreement on the amount of the shortfall, said James Madison University political scientist Bob Roberts.

Roberts said the next couple of months could get ugly in the Virginia General Assembly. A stalemate on the budget cuts could force Kaine’s hand.

“There is a distinct possibility there could be no agreement,’’ Roberts said. If that happens, it will be left to Kaine to make the cuts. 

The Associated Press contributed to this report.