State legislative analysts announced Monday that Gov. Mark R. Warner will have to cut approximately $1.1 billion more in state spending to balance Virginia's budget.
Balancing the state budget is the joint responsibility of Warner's administration and the General Assembly. Under Virginia law, the budget needs to be balanced by next February.
Warner spokeswoman Ellen Qualls said the $1.1 billion shortfall figure is an estimate of the cuts necessary after the previous round of $858 million in cuts Oct. 15. The estimate is based on the adjusted budget forecast made over the summer by the Warner administration.
"The difference between $1.5 billion in shortfalls from the re-forecasted budget this summer and the $858 million cut is the amount that is still needed to balance the budget," Qualls said.
She said the summer re-forecast adjusted for a number of transient factors.
"We knew that the shortfall would be higher this fiscal year because of the car tax rebates from rural areas and Medicaid were going to come in higher," she said.
State Finance Secretary John M. Bennett announced that the second round of cuts, to be disclosed Dec. 20, could include previously untouched programs.
In his Monday appearance before the Virginia House Appropriations committee, Bennett mentioned potential cuts to Medicaid services for the poor and basic state aid for local schools.
According to Colette Sheehy, University vice president for management and budget, K-12 schools remain untouched by previous cuts.
"I'm not advocating cutting K-12 education, but it is a major part of the state budget," Sheehy said. "Until this point it has been protected and if they don't cut K-12, higher education is really going to be in a heap of hurt."
Linda Bowen, chairwoman of the Charlottesville City School Board, said the schools are prepared financially for a 5 percent cut but that a larger cut will require a re-evaluation of programs.
"I'm certain there wouldn't be any cuts to the classroom, but everything else is on the table," Bowen said. "We'll be talking with state legislators on Dec. 19, and by then hopefully they'll have a better idea of how large the cuts may be."
Qualls said the administration's steadfast position on keeping the popular 70 percent car tax reduction and increasing Medicaid, public education and state employee insurance costs are contributing to the shortfall.
"Medicaid is an ever-increasing portion of the budget," Qualls said. "State employee health insurance is also going up, and as student growth increases so does the state's responsibility to fund education."
The $250 million to $300 million available in the state's emergency fund is a possibility for alleviating the shortfall. Another option includes consolidating or closing state facilities and agencies, Qualls said
"The fund was established by Gov. Wilder in the last recession to be usedon a rainy day," she said. "The line about it is that if there ever was a rainy day, it's now."
Although higher education has not been ruled out by the state for further cuts, Sheehy said the University is braced for more cuts.
"We are perfectly aware that the governor didn't balance the budget when he cut the $858 million in October," she said. "We don't know if the cuts are going to come to higher education or not, but we have reserved some money in the event that we do get cut further. If it's beyond what we've reserved, we'll manage what we need to manage."
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