Kaine urges resolve in somber assessment

RICHMOND — Gov. Timothy M. Kaine delivered the most somber assessment of the state’s condition of his term Wednesday, acknowledging tougher times ahead.

The 37-minute address was devoid of new developments. A $3 billion budget shortfall deprived him of the goodies governors often announce in their annual state of the commonwealth speech.

He was blunt about the hard times facing the state and ordinary Virginians during the deepest recession in decades.

“Like other states, Virginia is feeling the effects of the national economic recession, which looks like it will be the longest recession since World War II. Citizens are cutting back, they’re putting off purchases and they’re stretching their dollars to get through a tight spell,” Kaine said in the first minute of his speech.

The address — the fourth of five he will deliver in his single, nonrenewable four-year term — seemed like the fireside chats President Franklin Roosevelt used to boost the nation’s morale during the Great Depression. He urged Virginians to remain determined and hopeful, to continue investing even in the face of frightful times.

“Because of the economic challenge, I thought it was really important to talk about that reality. That’s what people are facing,” Kaine told reporters after the speech.

Legislators of both parties seemed to respect if not appreciate the speech’s restraint and tone.

“A couple of people commented that it was uninspiring, and I said actually it was probably the most direct speech I’ve heard from the governor on the state of the commonwealth in years,” said Sen. Kenneth W. Stolle, R-Virginia Beach.

Added Sen. Henry Marsh, D-Richmond: “It was practical and realistic and down-to-earth. It was an honest conversation.”

Kaine spoke of a recent visit to Petersburg, a city whose jobless rate is regularly among the state’s worst. People were worried about affording Christmas, about paying bills, about jobs.

“But they were not despairing. They were resolved. They were hopeful. And whatever worries they had that day, they were helping each other,” he said.

Kaine acknowledged cuts that will affect basic human services that had survived previous recessions unscathed. Cuts in state aid to local public schools in the next school year are unavoidable, he said. And the state’s Medicaid program — already the third most stingy in the nation — will need to trim its budget by nearly $418 million

“The fact is the size of the budget shortfall is too great to provide the same services in the same way that we have in the past. I have had to make difficult choices in recommending this budget to you,” Kaine said.

He plugged his most contested fiscal proposal, doubling the cigarette tax to 60 cents per pack, that appears doomed before a Republican-run House in a state with historic ties to the tobacco industry.

But Kaine, who next week takes over as chairman of the Democratic National Committee, made it clear in the speech that without the estimated $150 million a year the tobacco tax would yield, Medicaid cuts to the elderly, the disabled and children could be deeper.

“Virginia’s current excise tax covers less than half of the $400 million in Medicaid costs that smoking creates. I believe that the taxes on smoking should more closely match the budget costs that Virginia taxpayers incur because of smoking,” he said.

The speech further acknowledged economic circumstances much darker than just one year ago. Since then, he has ordered three new rounds of budget cuts, the most recent reflected in his austere budget.

He noted money in his budget to counsel homeowners in danger of foreclosure on how to remain in their homes. He noted an additional $1 million to the state’s food banks, now struggling to stock their shelves amid unprecedented demand from the poor and unemployed as charitable giving ebbs. He urged lawmakers to add $5 million to a fund the governor’s office uses to entice businesses to locate in Virginia.

Kaine also highlighted a proposed package of tax breaks and monetary incentives he announced Monday to attract jobs creating renewable energy such as solar- and wind-generated electricity and fuels from non-food vegetable sources to Virginia.

The brightest prospect Kaine offered for new funding for transportation and infrastructure and shoring up the social services safety net was from the economic stimulus package President-elect Barack Obama is proposing.

“We should see action on this welcome proposal soon after inauguration,” he said.

Kaine saluted Obama twice in the speech. Two years ago, Kaine became the first governor outside Obama’s home state of Illinois to endorse him, and last year he helped Obama become the first Democrat to win Virginia in a presidential race in 44 years.

Democrats applauded each reference heartily, while the Republican ovation was sparing.

But Republicans generally found kinship with a Democratic governor cutting government, even if it is forced by a budget calamity.

“I think over the last year with the two cuts he’s already made in the budget he’s been on the mark in making sure we cut at the appropriate time,” said Attorney General Bob McDonnell, who is unopposed for the GOP nomination in this year’s election to succeed Kaine.

House GOP Leader H. Morgan Griffith of Salem was surprised Kaine proposed no new spending.

“It’s unusual not to throw out something new, but we’ve got a $3 billion problem, so there’s not much room to propose anything new,” Griffith said.