Kaine wants to accelerate construction projects to help jump start economy

Gov. Timothy M. Kaine is opening the 2009 General Assembly tonight with a grim assessment of the economy and a proposal to help jump-start it by accelerating state construction projects.

In his State-of-the-Commonwealth message, the Democrat is making the case for the budget-balancing plan he outlined last month.

Kaine proposes closing a hole of at least $3.2 billion with spending cuts in previously spared programs, such as education; more layoffs of state workers and doubling the cigarette tax to 60 cents per pack to cover the rising cost of Medicaid, which supplies health care for the aged and poor.

"Instead of across-the-board cuts, I've proposed targeted, performance-based cuts," says Kaine, kicking off the final legislative session of his four-year term. "We have looked closely at each agency, asking hard questions about the priority of each expenditure and seeking data about outcomes. This approach has enabled us to find the savings that have the least impact on essential services."

The legislature was gaveled to order at noon today for 46-day session dominated by the budget and election-year politics. This fall, Virginians choose Kaine's successor as governor and decide whether Republicans will continue to control the House of Delegates.

In excerpts of his remarks, Kaine argues that public spending can stimulate the Virginia economy, which is caught in a national downturn triggered by the collapse of the housing and financial markets. Kaine is recommending that contracts for at least 30 major construction projects, worth at least $250 million, be issued by the end of June. This, he says, would put to bid an average of six projects per month between February and June.

"These projects will put people to work, build a higher platform for long-term economic success, and take advantage of a climate where construction costs are favorable," says Kaine.

Republicans, too, are offering an assessment of the state. In a response to Kaine's annual message, they urge additional controls on spending and greater efficiency by government. They're hostile to Kaine's recommendation that Virginia raise the cigarette tax.

Sen. Stephen D. Newman of Lynchburg, chairman of the Senate Republican Caucus, says, "Do we want to impose new taxes on some Virginians and not others, as the administration has proposed tonight? "Or do we want government as a whole to learn to live within its means, just like working families?"

Kaine says the tobacco-tax proposal -- if approved, it would be the second increase in the cigarette levy since 2004 -- is necessary to avoid deeper cuts in health-care services.

"Virginia's current cigarette excise tax covers less than half the $400 million in Medicaid costs that smoking creates," says Kaine.

"I believe that the taxes on smoking should more closely match the budget costs that Virginia taxpayers incur because of smoking. Under my proposal, fewer of Virginians' tax dollars will be diverted to cover the costs of smoking."

Kaine, who must balance his duties as governor which his other job as President-elect Barack Obama's national Democratic chairman, also is putting in a plug for his energy and environmental initiatives. Kaine favors tax credits to promote conservation and the use of alternative energy sources.

"As with the economy, government action is necessary to protect the environment," says Kaine.

"But government cannot do the job alone. It is up to each of us to examine our own families' energy consumption and to find ways to conserve."

Contact Jeff E. Schapiro at (804) 649-6814 or .