Members of the House of Delegates' money committees were told on Tuesday that the state could face a roughly $1 billion budget gap over the next two years despite increasing revenues.
House Appropriations Committee staff director Robert P. Vaughn told members gathered for a two-day retreat that there could be a shortfall of between $885 million and $1.5 billion for the 2013-14 biennium in part because of cost-drivers including Medicaid, updated K-12 school costs and state pension contribution rates.
"In the House, we will start examining all programs and all initiatives, especially programs that began within the last five years, and look at making targeted budgetary reductions, not rely solely on across-the-board cuts," Del. Lacey E. Putney, I-Bedford and chairman of the Appropriations Committee, told lawmakers at the onset of the meeting.
"Several other strategies we will employ to balance the budget in a responsible manner include: level-funding essential programs to the extent possible, and reducing or eliminating programs that are not meeting their original legislative intent."
Gov. Bob McDonnell has also signaled an austere budgeting process. In preparing his first two-year budget, which he will present to lawmakers in December, he has sought to find possible savings in two ways. He is using work groups to propose targeted savings in the state's costliest programs and asking agency leaders to suggest cuts for fiscal year 2013 and 2014 equal to 2 percent, 4 percent and 6 percent of their current general fund appropriation.
Vaughan's staff shared some of those proposed reductions but noted that the agencies and programs involved comprise about 25 percent of the general fund budget. The recommendations range from eliminating positions to closing facilities to increasing fees for state park services.
All of the state budget wrangling will happen against a backdrop of uncertain federal action. Washington lawmakers looking to slash costs could send down cuts in grants or programs or make reductions in defense spending. McDonnell has proposed starting a Federal Action Contingency Trust Fund with $30 million that state lawmakers could tap to make up for any loss in federal spending, perhaps backfilling grants or programs that are slashed.
"I would implore all the members of the House to provide me their input as to how we balance this budget and what specific programs could be reduced or eliminated," Putney said. "What I don't want is generalized statements of cutting waste and eliminating inefficiency. Neither of those are line items in the budget."
The retreat continues today.
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