- Associated Press - Thursday, October 21, 2010

RICHMOND, Va. (AP) — Gov. Robert F. McDonnell has told heads of state government agencies to prepare plans to possibly cut their budgets by up to 6 percent.

The memo, sent Thursday, comes amid reports that the state’s finances appear to be slowly on the mend.

Mr. McDonnell’s memo tells the directors of state bureaucracies to submit contingencies for reductions of 2 percent, 4 percent and 6 percent.

The governor, now meeting with economic advisory panels, sent out the memo as he prepares to draft his first package of state budget amendments. He submits his budget recommendations to legislative budget writers on Dec. 17.

Mr. McDonnell noted increases in spending mandates, particularly the growing costs of Medicaid from increasing enrollment and use.

He told his agency chiefs that the worst state fiscal slump in decades is not likely to improve soon and that the 2012 state fiscal budget is likely to be as austere as the current bare-bones budget.

Mr. McDonnell’s chief of staff, Martin Kent, wrote that the governor “must prioritize the state’s budget to address the most critical needs, the increases in mandated services and the programs that will revitalize the commonwealth’s economy. This means that he must evaluate the entire budget to assess the value of the lowest priority spending against the above demands.”

 

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