- The Washington Times - Tuesday, December 4, 2001

RICHMOND Gov. James S. Gilmore III reduced the state's official revenue estimate by another $112 million yesterday, widening the expected hole in the state budget to $1 billion and warning that the recession may linger longer than first projected.
The revision likely rules out any chance that state employees and teachers, state college faculty and sheriffs' deputies will get raises this year, and it sets the stage for deep cuts in a new two-year blueprint for state spending through 2004 that Mr. Gilmore will submit Dec. 19.
"This is a very difficult budget more difficult than most people understand it to be, more difficult than has been discussed publicly, more difficult than many legislators think it is. It is going to be very difficult to achieve these things," Mr. Gilmore said.
He would not discuss plans for his spending cuts, including possible layoffs, for this year's revised budget or the new two-year budget, but he said he would not propose a tax increase in his budget.
In November, Mr. Gilmore said the state will fall $890 million short of its revenue forecasts and announced that he had ordered state agency heads to prepare recommendations for cutting 2 percent from their operating budgets. He also announced that the withering economy would make it impossible for him to complete the phaseout of the local tax on personal automobiles by 2002, the signature achievement of his term.
Mr. Gilmore said yesterday he was adopting the forecast of the Governor's Advisory Committee on Revenue Estimates, the darkest of several assessments made to him in recent weeks. GACRE, a panel of influential Virginia business leaders, warned Mr. Gilmore and Gov.-elect Mark R. Warner in a private Nov. 19 meeting that the recession will last longer than economists had projected, and that the recovery would be slower, the governor said.
"A governor could look at a combination of these things or could take the top one, which, of course, would project more money and make it easier to budget … but instead we're going to make some tough budget decisions and go for the lower amount," Mr. Gilmore said.
In a two-paragraph statement, Mr. Warner, a Democrat, commended Mr. Gilmore's conservative revenue estimates, but said he needed to know more about where his Republican predecessor plans to pare spending.
"This requires not only a realistic short and long-term evaluation of revenue projections, but also a hard look at the expenditure side of Virginia's budget. I look forward to seeing all of the facts as we prepare to deal with these challenges when our administration takes office," Mr. Warner said in a statement issued by his transition office.
Delegate Vincent F. Callahan Jr., Fairfax Republican and chairman of the budget-writing House Appropriations Committee, said Mr. Gilmore's numbers might not be austere enough. His committee's budget analysts last month projected a shortfall of up to $1.2 billion this year.
While cuts will be unavoidable and pay raises unlikely, public education would most likely receive the top priority from the legislature that convenes Jan. 8, Mr. Callahan said.

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