Kaine details budget plans
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Budget Presentation - Dec. 17
Gov. Timothy M. Kaine this morning unveiled his proposed budget, which calls for increasing Virginia's cigarette tax and cutting jobs.
EVA RUSSO/Times-Dispatch
Gov. Timothy M. Kaine gives a thumb’s up to members of the General Assembly after a budget briefing this morning in Richmond.
Kaine, heading into the final year of a term characterized by a down economy, said doubling the tobacco tax from 30 cents to 60 cents per pack is a relatively easy way to help close a $2.9 billion hole in the two-year $77 billion budget.
Kaine says revenues from a higher cigarette tax -- about $160 million -- could offset rising costs of the Medicaid health program for the poor and aged.
The tax, which Republicans say unfairly hits Richmond-based tobacco giant Philip Morris USA, is part of a budget-balancing plan that includes spending cuts, a nearly $500 million drawdown from the state's "rainy-day fund" and an additional 531 layoffs.
According to administration documents, public safety -- which includes the state's vast prison system -- would give up the most jobs -- 381. Next is health and human resources with 57 positions, followed by natural resources with 43 jobs; education 23; and commerce and trade with 16. The remaining secretariats, as well as Kaine's office, surrender a handful of jobs.
Kaine is painting a bleak picture of the state's economy, but says it's still better off than the nation's.
"While Virginia's economy is still stronger than the nation's economy as a whole, we are definitely feeling the effects of the national downturn," said Kaine, adding that Virginia will continue feeling the effects until the end of next year.
Kaine, who largely spared education in previous budget cuts, includes in his latest plan reductions in education.
"We cannot ignore the single largest state expenditure in this budget," said Kaine. Among reductions in education: reduced state support for non-instructional personnel and eliminating state support for school construction grants.
Kaine's budget also proposes closing one of the state's five training centers for intellectually disabled persons, the last state-operated mental health hospital for children and restructuring other state mental health facilities for a savings of $46.7 million.
Also proposed is a potentially controversial change to the sentencing policy that would allow the director of the Department of Corrections to release inmates up to 90 days before the end of their sentences, up from the current 30 days. And law enforcement agencies also faces cuts of seven percent in local Sheriff's departments and Commonwealth's Attorney's offices.
Kaine said the Virginia Department of transportation will also trim it's workforce by 1,000 people over the next two years through retirements, attrition and restructuring of its central office staff.
In addition to the tobacco tax, the governor proposed eliminating the "dealer discount" rebate -- which allows retailers to keep between one and four percent of the state tax that they collect -- for a savings of $64.3 million.
Kaine's budget is not without spending increases. The governor has proposed a $5 million increase in the Governor's Opportunity Fund, which is the commonwealth's primary job-creation arm.
Kaine also includes a $1 million grant to the Virginia Federation of Food Banks, and a $26 million increase in funding for need-based financial aid for Virginia students attending Virginia's public colleges and universities.
As for state employees, those who survive the layoffs and cuts at their respective agencies will have to make due without a salary increase, which is eliminated under the Kaine proposal.
Republicans quickly criticized Kaine's plan. While there was muted support for some cutting initiatives, a number said a tax on tobacco will not pass the House of Delegates, and said the governor needed to do more cutting, anticipating an even deeper budget hole when the issue gets taken up at the General Assembly session next month.
"For years, Republicans warned Governor Kaine, (former Finance) Secretary Jody Wagner and others in the administration that the revenue forecasts they used to justify their addiction to higher spending and bigger state government were irresponsible and reckless," said Delegate Jeffrey M. Frederick, chairman of the Republican Party of Virginia and member of the House Finance Committee.
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Reader Reactions
The fat, bald man hath spoken, let there be an increased tax on cigaretttes. Now isn’t that an original idea?!!
Really the guy is an idiot and most of the G.A. is worse.
One thing about a democrat though,and you’ve got to give them credit, no matte how bad things get, they can’t get so bad that a good tax increase won’t make the dems feel better.
Let’s help the poor get a higher education at the expense of government jobs and let’s help poor 4 year olds go to kindergarten at the expense of government services (that’s an oxymoron) but to heck with everyone else.
The best news is Kaine won’t be around much longer.
Maybe we can talk Jim Gilmore into running again and finishing the abolition of the car tax!
Nightmare, how can you say Kaine has done everything he could to deal with the current recession. Every business and government forcasting model has been projecting a significant reduction in revenue for years 2008-09.
This man has had his head in the sand. He submitted a budget that was bloated and had it not been for the House that budget would have passed and this situation would have been even worse. He then tried to get a tax increase passed that would have put tax money into mass transit in Northern Virginia. That tax increase attempt had nothing to do with highway construction…it was all about busses and trains.
He has not gone far enough to deal with the current deficit. He should have reduced payments to all entitlement programs including education.
Thank God he will be gone after this year.
I have to commend Governor Kaine on doing all he can to deal with the recession not only our country has found itself in, but our state. I agree with the increase of the tobacco tax, and maybe it should be a little more. The conment I really wanted to respond to is the number of people incarcerated with excessive sentences which is costing the state an average of about $28,000.00 per inmate per year as long as they stay healty. The state has a sentencing commission that calculates a suggested length of sentence that goes from low, med and high suggested guidelines for a convicted person to serve time. When a judge ignores thoses guidelines and gives a maximun sentence for a non violent offender, he is taking up space for offenders that are violent and also costing the state a tremendous amount of money. I know that a very high precentage of these inmates are addicts that have committed crimes because of their addictions. If Governor Kaine wants to understand how so many Virgins have ended up incarcerated in prison, he needs to look at the sentencing guides and why they are not being used to give sentences that are calculated by those guideslines. I believe that society will look back in 20 or 30 years and be appalled that we have treated addiction the way mental illness was treated with labotomies. I think Governor Kaine is making some very hard decision and it’s always easy to find fault, but if the decision comes down to reducing time for nonviolent offenders and educating our children, I know where my wish list would be.
..gov kaine,,dont forget that you already took our tobaco settlement money from us !!u c u sued on my behalf for spraying x/tra nicotine on cigs to get me hooked for life !!good job,,i have been hooked for almost 40 yrs !!yet i did,nt receive one penny from settlement,,so where is my $$,for patches,,gum,,re-hab programs to get off this additions worse than cocane !!,,and then have the nerve to say we cost taxpayers !!typical gov..take my money lie about it and then justify taking more !!what a hoax,s..NO MORE TOBACO TAXES,,until i get my millions u sued for !! and to mental health,,how many of those people are victums of womb abuse,,drug addits,,alchol sydrome,,etc,,go after then equally,,and how about all the people locked up,,more people per-capita are locked up in the commonwealth than most other states,,and more supressive laws to get people locked up in this state than CHINA !!,,and why do gov workers get all kinds of benefits that we dont,,put them on par with wal-mart,,tks merry x/mas
My 2 cents: I don’t care that smokers are taxed if the money is used for healthcare. We all share that cost and they should pay for their lack of self control. I don’t weep for Phillip Morris - their dividend in Oct ‘8 rose over 20%; their profits up over 31%. Tax church property that is not the chapel. Get the govt. out of religion. I am outraged that the Governor would propose any spending increase. I am outraged that he would cut State Police. That should be the only thing that is off limits. Gangs, drugs, white collar and computer crimes - these need to be taken care of. Don’t whine about Kaine unless you whine about the state GOP. Ever since the repeal of the car tax, state govt. has been in a financial mess. Don’t forget Gilmore actually ran out of $ one year. State employees could not get paid until after July 4, while at the same time, he went into the next year’s $ to keep the govt. afloat. And of course, Warner gave us VITA, a bottom-less pit of wasted $. Neither party is fiscally responsible. And for those who just complain, the budget is on-line at the Department of Planning and Budgets website. Look at it line by line and suggest some cuts.
Everyone seems to like numbers & percentages so check these out. Kaine proposes a $0.30 increase in the tobacco tax, that’s a 100% increase from the prior increase to $0.30 from $0.025 per pack. So that makes a 2300% increase between Dems Warner and Kaine in just 4+ years. What other tax sources have increased like that? And that does not include other non-cigarette tobacco tax increases, like cigars, pipe tobacco, etc. And now there are plans to change the tax basis on smokeless tobacco from the sales cost to a weight basis. So when are we going to tax the overweight, lazy, colesteral lovers, and others for their contributions to increased medical costs. Interesting also to find to no surprise that the State has not been controlling education dollars for school admin staff. And as RTD article today points out lower teacher/pupil ratios and higher per pupil costs do not lead to better student performance. There’s plenty of “fat” to trim in the Va. budget and not with “smoke” & mirrors, again! Tobacco taxes don’t cost me a dime now, but can’t support these increases on principal. And of course the non-smokers will always come out with “make it $5 a pack”. Tax the other guy, just not me. Kaine also looking to take away the small administrative discount % retailers receive for collecting sales taxes. Never saw him complaining of the 33% and up that lawyers gets as a admin fee for their “collection” services.
Hey, Virginia, Smoke ‘em if you got ‘em! If you don’t got ‘em, go buy some! Save our economy! What? You’re still sitting there? Go buy some smokes!
If I read correctly Kaine’s budget cutting proposals, two line items stood out for me: 1) eliminating 531 jobs at Christmas, while 2) increasing the college aid for the need-based by $26 million. If each lost job on average cost $65,000 (including benefits), then Kaine’s increase to this college aid fund equals to about 75% of the lost jobs; therefore, is the governor telling Virginia that it is more important to “higher educate” the poor than to maintain the quality of state services we have grown to enjoy at the cost of so many families at Christmas?
Put an additional 30 cents tax per can of beer on the table, and lets really add the taxes to wine and hard liquor! Talk about a fast way to balance the budget, not remove one person from their job, and maybe even create more jobs in the long run. There’s more associated disease, family and property destruction, and general mayhem with alcohol abuse than with cigarettes! Look at what alcohol abuse costs the public and get real! Look at what alcohol does in relation to Medicaid costs, foster homes, jail sentences and related costs, damage to Commonwealth property, etc.!!!! Give us smokers a break for bearing the brunt of society’s ills when alcohol does more damage in the long run to far many more individuals! Remember it was TOBACCO that put Virginia on the map and made the Commonwealth something to contend with!
And Kaine will probably end up in the Obama administration in a couple of years to help fix the rest of the economy. Next Gov. will be a Republican, and lets see how he does.
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