McDonnell budget: furloughs, job cuts, reduced services for the sick and children, no new taxes

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.

The governor also wants to spare higher education from further cuts and seeks to restore some of former Gov. Timothy M. Kaine's proposed cuts to public safety.

Schools and health care -- the largest parts of the state's general fund budget -- 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.

"All the cuts give me heartburn," McDonnell said at a news conference. "All of them were difficult because I know that behind every cut there is a Virginian . . . that might be affected."

An additional $612 million in cuts would come through the Virginia Retirement System, by slashing the state's current contribution rates for employees by almost 56 percent in the first year and 64 percent in the second. And, the retirement system would help pay the way for state and local governments to escape some of the pain in balancing the budget.

The governor proposed to cut contribution rates for teacher plans, shared by the state and local school divisions, by 45 percent the first year and 50 percent the second. Those reductions do not reflect the employees' 5 percent share, which the state would continue to pay for current employees and which many school divisions pay for teachers.

On the other side of the employees' proposed unpaid days off, McDonnell wants to give them a 3 percent Christmas bonus in December 2011.

He also wants to eliminate former Gov. Timothy M. Kaine's proposal under which state employees would be required to contribute 1 percent of their salaries to their retirement plans in fiscal 2011 and 2 percent in fiscal 2012.

McDonnell unveiled his budget proposals at the Patrick Henry Building, just four days before the House Appropriations Committee and the Senate Finance Committee release their versions of the state budget.

McDonnell publicly shared details of a savings plan that he has privately shared for weeks with lawmakers. Democrats have criticized him for standing on the sidelines during difficult budget negotiations but today he defended his stance.

"I have chosen the process of collaboration rather than dictation," he said.

Appearing tired, McDonnell made clear that his primary budget and legislative focus is enhancing tools for economic development and job creation. He's proposed $50 million in new spending for tax credits and incentives. He said that while he realizes his proposed cuts would cause some hardships he believes they are preferable to more taxes.

McDonnell also said revised revenue projections for January show the state is doing a little bit better than projected, so he proposed increasing state revenues by $200 million.

Many of the proposed reductions hit the state's safety net for the most vulnerable residents -- the poor, disabled, homeless.

For example, the jobs to be eliminated include 390 direct-care positions and 49 support positions at various state mental-health facilities.

Parts of McDonnell's plan drew immediate pushback from advocacy groups as well as budget writers who will steer the final product. They will largely decide what in his plan survives.

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.

In the budget he submitted before leaving office, Kaine proposed one furlough day.

In cutting funding for the state's public schools, McDonnell suggests eliminating the school breakfast program, using school buses for longer and decrease funding for at-risk students.

McDonnell would follow Kaine's lead by capping state funding for school support staffers.

"They are throwing the children of Virginia's poorest localities under the bus," said Robley S. Jones, chief lobbyist for the Virginia Education Association.

McDonnell said education had been spared some of the more draconian cuts in previous budget reductions. But reaction from the school community was swift, as evidenced in a Henrico County schools meeting today.

"We're going to have to spend some time looking at some things that may be indeed somewhat catastrophic to the school division, if indeed these figures hold as they are," Superintendent Patrick Russo said. "As we move forward, everything is on the table."

Russo said he is most concerned with McDonnell's proposal to eliminate the mentor teacher and school breakfast programs. Research shows that students who eat breakfast perform better, he said, and school divisions would have to pick up that extra cost.

Board vice-chair Lamont Bagby balked at those proposed cuts as well as reductions in state salary supplements for sports coaches and department chairs and extending the work lives of school buses.

"I know you're going to cut me. Give me the knife, I'll cut myself," Bagby said. "Let me cut where it's going to hurt the least."

Public safety would see a boost of $60 million in funding over the biennium under the governor's plan.

John Jones, lobbyist for the Virginia Sheriffs Association, said rural sheriffs, with the proposed funding increase of $19 million, would be able to continue to patrol 24 hours a day.

McDonnell's plan also slices funding for community organizations, including the Fan Free Clinic and the Arthur Ashe Health Center, which provides support for AIDS early intervention and counseling programs in Richmond.

Those facilities are among more than a dozen community service organizations looking at cuts.

The details of part of McDonnell's plan drew Sen. A. Donald McEachin, D-Henrico, to the Senate floor today.

McEachin said the continuing divisions among Democrats over spending cuts are making it difficult to reach agreements on a budget.

"As for me, I'm not voting for a budget that is all cuts and no revenue."