A Conversation With Tim Kaine

The Times-Dispatch: Welcome -- anything you want to open with?

Gov. Tim Kaine: I'll just say some words about the budget and then about some non-budgetary issues just to kind of prime the pump.

Obviously, a very challenging budget -- the most challenging thing I've done. It's not just a $2.9 billion [shortfall], but $2.9 billion on top of three rounds of cuts already. So, the easier things get harder to find -- but there are still important things to find. So, in making the cuts, my basic advice to my team was, let's cut for tomorrow, not for today. You can balance any budget in five minutes if you know the size of the slug. You can say, OK, what percent of the budget is that? Everybody take a 9.8 percent cut and we're done. But you ought to be making policy as you go so that when those dollars come back in the drawer, you're not just spending them on the same old things you're always spending them on -- you direct them to the most appropriate use . . . .

In the big areas: K-12 education, that was held harmless through the first three rounds. I directed my team to find cuts outside the classroom . . . .We ought not to be treating administrators better than we treat instructional personnel.

Higher Ed is tough. Fifteen percent cuts for four-year [colleges] and 10 percent cuts to community colleges -- lesser amounts for community colleges because they are the most affordable for people who don't have a lot of money. But, we need to invest while we're cutting, particularly in affordability strategies where Virginia, and most states, are not strong, so I put 26 million new dollars in on top of what we're already investing now.

Health care -- a lot of different initiatives but the big, big one is Medicaid. If nothing happens other than the rolls increase the way we predict they will increase because of a soft economy, the Medicaid budget had to be increased by $358 million. But I basically, with that increase, I took about $420 million out of Medicaid by doing a variety of things: Capping the enrollment to programs, not allowing enrollment to grow. Freezing, or in some cases reducing, provider reimbursement rates. Programs that were scheduled to begin -- putting those off. The one thing I said we're not going to do is that I didn't want to kick people off Medicaid . . . .

Obviously the controversial part of the whole health care package . . . is the tobacco tax and taking it to half the national average as a way of forestalling deeper Medicaid cuts . . . .

In public safety . . . by taking the current authority the DOC [Department of Corrections] director has to allow someone out [of prison] 30 days before the end of their time and moving it to 90 days for someone who's in for a nonviolent crime, that's about the equivalent of a thousand DOC inmates a year. A thousand is a prison -- that's a $100-million-plus capital expenditure . . . .

Finally, on transportation: State and federal revenues are both dropping in those categories as they are in other areas. My instruction has been to prioritize matching federal dollars, prioritize rail and public transit, prioritize our public/private partnerships where we're able to get private dollars to the table and match it with state monies. We are the leader in the country on public/private partnerships. But where we're still hurting and where the reductions last April -- the federal reductions -- will continue to hurt us will be new roads and then significant renovation, maintenance on things like bridges. I didn't think when I campaigned for the president-elect that he would do infrastructure spending out of the gate, so by a pleasant coincidence he is and that's going to help us. The amount of that is going to be determined. It will be helpful. It will put some projects back on the books we thought we had to take off . . . .

Smoking ban: . . . There are smoking ban bills being put in by Republicans this year. Just slightly different than mine. I don't yet know all the bills but bills are getting put in. There's kind of a ferment on this issue that is going to lead to some significant discussion . . . .

We'll do some election reform, there's a no-excuse, in-person absentee. We're also going to do some things to clean up the military absentee-vote witness requirement issue . . . .

The session will be overwhelmingly budget. You know it's been my experience that sometimes people pull together when the times are tough and we'll see if in fact that is the case this time.

T-D: The tobacco tax is probably one of the least unpopular taxes you can impose on people, but it seems like there's a couple problems with it. It never seem to raise as much money as it is expected to and it is maybe the most regressive tax out there. Does that concern you that it's going to hit lower income people and finally, in Virginia, it's going to hit some industries that are pretty important here?

Kaine: The regressive issue doesn't worry me. Normally it does, but a tax like that is in the sin tax category. That's a kind of behavior that we ought to try to discourage. We have a system that tries to treat illness well. It doesn't promote health very well. I think that is part of the challenge we have in this country. We focus on health care more than we focus on health. I think that we ought to be doing things to encourage people to give up smoking. That is a challenge with an industry that has been big in Virginia. Altria's been a really good citizen in terms of corporate philanthropy, but also they're pretty responsible. They embraced the notion of FDA regulation in tobacco, for example. Many other tobacco companies do not . . . .

T-D: To jump to another issue: What is a green job?

Kaine: It's a convenient term for a job in clean-energy, a job in an environmentally-friendly industry, or a job in efficiency or conservation. And I think in particular what [my clean-energy] package is focused on is alternative energy and conservation and efficiency. The energy policy of the economy and the nation is this tough combination of what I think are four goals. We want to maintain reliability and relatively low cost -- all costs are going to go up. I think we are relatively low compared to other states, which has been good for consumers. We want to reduce our dependence on foreign sources and increase our native sources. We want to promote conservation and efficiency and we also want production of energy to be cleaner. We're trying to balance those four goals and some of them are at odds with each other. Low cost is somewhat counter to conservation. Many of the states that have invested in conservation are high-cost states.

On the green job side, the way we look at it is, trying to build a more robust industry in Virginia around cleaner energy production and also around conservation and efficiency that works.

. . . Not everybody in the environmental community says that nuclear is clean energy. I say that it is. It's greenhouse gas emission-free and while there are some challenges, our naval operations and the experiences of other nations have proven that we can provide -- that this is a positive for our nation.

T-D: Isn't there always a great risk that when governments subsidize some particular area that they -- if you look back in 10 years and you've subsidize your own projects and you've strangled those that may turn out to be a better idea. Are you concerned about that?

Kaine: It is the case. You can guess this wrong, but you can also go wrong the other way. For example, Virginia was kind of the leader in the 1970s and '80s in terms of companies that were wind and solar. We're sliding behind where an awful lot of states are . . . .We have a good economic climate in Virginia and a generally low tax and inflation and that's great. Sometimes you do have to target a little bit if you want to catch this wave. I think the thing to do if you're trying to target something like green jobs, you can try to be somewhat technology-neutral.

T-D: On a state level, you know that there's going to be a lot of federal money poured in this direction. So, it's a good idea to get as much of it as we can.

Kaine: Absolutely . . . .We have a strong feeling that low-carbon/no-carbon energy sources -- they're going to happen. There's going to be research -- it's not really an "if" question, it's a "where" question. And we do not currently have the set-up that would make Virginia the attractive place for these investments to come.

T-D: In recent years, obviously we've had a lot of difficulties in getting budget agreements. If we get down to it and people are at loggerheads -- where is your [Democratic National Committee] work going to come into play?

Kaine: Well, DNC kind of cuts different ways. There are those who are going to give me hell about it up on Capitol Square -- but they're the ones that are going to give me hell anyway. This does not increase the volume level one bit. It may change the song sheet or the lyrics but it's not going to change the volume of it at all.

The second thing is that there is no downside to me having a closer working relationship with the president-elect. And that at the end of the day was one of the factors that I had really weighed. I had turned the position down when the party asked. I had sent a letter to the president-elect that he recommend somebody else for the position. They called me back and said, "We want to go in a different direction, you have to do this." . . .

When the president-elect said, "I want you to do this," I don't have a choice. And as I wrestled with it over the Christmas holidays and talked it over with my family, you know, I've never been in a position, and never may be again, where the president-elect tells me, "I really need you, not somebody else, I need you." I found it hard to say no . . . .It just struck me as, you know, there is no way this is going to be bad for Virginia for me to have this closer relationship with the president.

Now when we get down to budget time, you know, crunch time at the end, I don't think that's going to make it hard. It's going to be hard because the numbers are hard. It's going to be hard because the decisions are tough.

T-D: In the spring, you talked about what your future held for you and you had an interesting comment about how you like the team-building aspect and that you envisioned yourself in the non-profit or education sector, maybe here in Richmond, which seemed to indicate some interest in the VCU presidency.

Kaine: Yes, I was very interested in VCU, very. But I had a timing issue of major importance. As long as I am writing VCU's budgets and appointing its board, it would be very unethical for me to be a job-seeker and it wouldn't be fair to other people who wanted that job. And, if I were a president of another college, I would say, "wait a minute here." . . . The other thing I kind of contemplated was going back to my legal background -- to the judiciary.

T-D: Will you move to the Washington area?

Kaine: I'm going to stay here. My middle son is going to be a senior in high school and my youngest will be starting high school. And I feel like in 2010, 38 governorships, mid-term elections, I'm going to be traveling wherever I live. So I'm going to stay here. After 2010 we'll figure it out.

The thing about the [DNC] position that's a little bit interesting is that Barack intends to do a couple of very different things with it. We'll work hard to make those intentions real. One of my discussions with him, I said, "I'm not an attack dog. I love my team and I'll push my team." He said, "I'm not either and this is a time when we have to push a national unity government and I can't have the DNC using a different tone than I'm trying to use."

T-D: One of your predecessors at the DNC -- [Terry McAuliffe] -- is seeking to become your successor. Do primaries help or hurt?

Kaine: My primary approach [when I ran for lieutenant governor] really helped me because I was running against two better-known state legislators. I was thought to be the underdog -- nobody really knew me outside of Richmond. So I had to put together a statewide campaign. I felt much more confident going into a statewide election in November having run one. I got really tested. I had to advertise and go into the various media markets. So I woke up the day after the contest -- broke -- and I had to start all over again. But I also woke up with name recognition where my opponent didn't have that kind of recognition . . . . So how this one fares -- if the three Democratic candidates keep it in the range of reason and don't bloody each other up too much, I don't think it's going to hurt. If it gets too tough, elbows may get too sharp.

T-D: How would you attribute your party's success statewide?

Kaine: I think what the Democrats have done, we realized, beginning with Mark [Warner], that Virginia is an independent state. That you win statewide races by winning the independents. Independents are problem-solvers and unifiers. That would be the two -- that's the Democratic brand in Virginia. We try to solve everyday problems so we're not hard ideological, we're not hard partisan, we're not gridlocked or obstructionists . . . .I tell the Dems all the time, now that I'm getting to be a senior statesman, that we've not won a single election because of the letter after our names. We've only won because we've made people associate with that label this idea of problem-solvers and unifiers. As soon as we stop doing that, we're going to start losing elections.

T-D: Is it kind of a dangerous time to be the DNC chairman? It's sort of like taking over the Yankees because sooner or later, I guess, the Republicans are going to win.

Kaine: Yes, in that sense it's dangerous. We have huge national challenges. I've talked to Barack about if the stimulus works as you hope, what will the economy be like in 2010? It may still not be rosy. So, the normal tendency is the president loses elections in the interim. We are at a challenging time and . . . I'm not sure how patient the electorate is about this, but you know, I've never looked at the easy road . . . .It will be tough, it will have aspects of the job I will love and there will be aspects of the job I ain't going to love.

T-D: What else did he ask you to do before he asked you to do this?

Kaine: Two things. The VP was obviously a long list. I thought I was a long shot on a very long list but then it became a long shot on a very short list. [I think Obama] has confidence in me to support him and tell him what he ought to hear and not just what he wants to hear . . . .He said, "If I don't pick you, I want you to help me run things." I said -- this was back in early August -- "I cannot be in the Cabinet. I think Virginia voters would stand for VP but I don't think that it would be right to leave the governorship early, because it's just one term." And he got that.

After the election, he said, "Okay, I remember what you said, but we're putting a Cabinet together, so what's your position?" And I said, "I'm sticking with what I told you." We didn't talk about any position. He didn't say, "I will definitely put you here or there." He did reach out and say we make a perfect team together and I'd kind of like to find out what you're thinking. And I told him that I couldn't do it.

T-D: I know you don't know the final numbers at this point, but what do you think the practical effect the stimulus is going to have on jobs and infrastructure in Virginia?

Kaine: Well, there will be three components to the package : There's the counter-cyclical safety: Medicaid and unemployment insurance and work-force spending. There will be the middle-class and small-business tax cuts. Piece three will be infrastructure, which will be a mix of the traditional -- like building bridges -- but also public transit, smart grids, and different kinds of infrastructure investments . . . .Infrastructure -- I bet we will be able to take a number of projects we took off the six-year plan in April -- others still might come off -- and put them back on. That depends on the criteria . . . .

T-D: Within three weeks, you're going to get a revised revenue forecast. How concerned are you about what that might show and what does it mean for this session?

Kaine: It's going to be a significant one and I've got trends going in two different directions -- even within revenues. We have the December ending numbers and sales tax numbers are worse then any of our projections. For some reason, income taxes are continuing to rise ahead of our income tax projections. Income taxes are by far our biggest revenue source. If you net out where it is right now, we are actually in pretty good shape compared to what our projections indicated.

January data will be really important because it will give us corporate income tax information that will be pretty solid. So, within five days or so within the end of the month, I would be able to take all the sales data, and the income data and kind of map that out and -- based on a whole series of trends -- I would not be surprised if it suggests that the revenue number needs to come down further. I didn't think it was prudent in December to take it down more because what that means is more layoffs and more services cuts. As the executive, I have the power to do layoffs and service cuts when I need to do them. I didn't think that right around Christmas with a lot of layoffs already -- I didn't think we should that . . . .

T-D: When you were elected, things looked pretty sunny. It's not your fault they've changed, but it must be disappointing that simply because of economic situations, a lot of the things that you were interested in doing, you really haven't been able to do. And you've had to spend so much time figuring out how to cut government. Personally, does that make your job less satisfying?

Kaine: It makes it harder, but not less satisfying. In a perverse way, my emotional temperament is better than it is when everything is going great. Maybe that's not unusual. I think I do my best work when I'm pressed. I don't need everybody to love me. I'm not in politics to be liked. I like people and most like me, but I don't need people to like me, so I don't have a hard time making a tough decision. And I tell my Cabinet: "Look, we make people happy when times are good and we earn our pay when times are tough. We might put more of a stamp on the long-term policies of the future of this commonwealth by the decision we're making when times are tough than we would when times are good." . . . There are decisions that you should make that you don't have to make when times are good -- that you have to confront when times are tough. It's really important that you make them. My view of crisis is that it's a terrible thing to waste.