Lawmakers to Chamber: State budget woes to hit home

Central Virginia legislators warned local business and government leaders Tuesday morning that the state will have to cut support to some services because revenues continue to decline.

In the Lynchburg Regional Chamber of Commerce’s annual legislative outlook meeting, lawmakers outlined their agendas for the 2010 General Assembly session. They said they will have to deal with a $3.5 billion budget shortfall that could affect any entity that relies on state money.

Del. Kathy Byron, R-Campbell County, said that the budget process will “require us to make some dramatic cuts and to look at government and the role that government plays in our lives.”

The state cannot count on economic stimulus money to ease that shortfall this year, said state Sen. Steve Newman, R-Lynchburg. Also, the state’s “rainy day fund” has been depleted so much that the state will be able to take only “a very nominal amount” from it.
“I wish I came to you with better news,” Newman said.

He said that schools’ standards of quality funding and transportation money would be affected, “and there’s really no way around that.”

Although this year the state committed $17.2 million for three years to pay for Amtrak’s second daily passenger train from Lynchburg to Washington, D.C., Newman said the support cannot continue indefinitely. Train riders “need to use it or you will lose it,” Newman said. “I don’t think there is an appetite in Richmond for this thing to be an ongoing government program. … It has to be going on its own.”

Byron said that Gov. Timothy M. Kaine might propose tax increases to deal with the budget shortfall before he leaves office in January, but that such a proposal would be “purely political” and would not be enacted.

Byron said it will be important to make sure the state remains a place where businesses can afford to operate, mentioning Babcock & Wilcox’s announcement Monday that it would move its corporate headquarters, but not its local operations, to North Carolina. “We want to make sure that the corporate tax structure is one that will encourage companies to keep their employees in Virginia and not send them elsewhere,” she said.

Del. Ben Cline, R-Rockbridge, said that the state needs to set priorities in its budget, especially in the area of education. “We need to look at non-mandated education programs” and administrative expenses “before we start laying off teachers and closing schools,” he said.

Cline also wants to limit the amount of money that the Virginia State Lottery can use for advertising. The lottery currently can use 5 percent of its revenue to advertise. Cline wants to limit that to 4 percent or a dollar amount so more lottery revenue goes to schools.

Lynchburg’s delegate-elect Scott Garrett said that he wants to use his new seat to encourage tax incentives for small businesses, a goal he began pursuing on Lynchburg City Council. “I do believe that our next governor is very focused on just that opportunity, and I think you will see some creative tax opportunities to help your small businesses get back off the sidelines,” he said.