- The Washington Times - Monday, January 8, 2001

RICHMOND It was tempting, before the nation's economy began to darken, for state government agencies to live large on seemingly inexhaustible budget surpluses.

Those days are over.

As Virginia Gov. James S. Gilmore III fights in the upcoming General Assembly session to keep his phaseout of the car tax and other priorities from falling victim to revenues far below their projections, the administration feels it needs to show legislative budget-writers where it is trying to cut costs.

When the legislature adjourned last year, the U.S. economy was growing at unprecedented rates, paced largely by the soaring stock prices of Internet start-up firms. When the dot-coms began crashing last spring, stock markets took a dive, and economic growth began to slow.

The effect in Virginia was a conspicuous drop in tax revenue, especially from the Internet companies that have flourished in the state. As a result, the General Assembly session that convenes Wednesday will have to make substantial adjustments to the state's $48 billion biennial spending blueprint.

"Let me be careful how I state this because it's important," said state Finance Secretary Ronald L. Tillett. "I don't want it to sound like I am excited about a slowing [economy]. My preference, obviously, is to have nice, normal, average growth in revenues and spending. This provides an opportunity to reduce the size and scope of government."

Mr. Gilmore wants state agencies to cut total spending by $206 million. While that is less than 1 percent of the total general-fund budget, Mr. Gilmore believes it is necessary for the state to increase spending on health care and other crucial services. Some agencies face cuts of 3 percent to 6 percent because others, including those in the Department of Public Safety, would be exempt from the belt-tightening mandate.

Much of the savings will result from using the Internet.

For example, the Department of Human Resource Management proposes saving the general fund $1.6 million through greater use of the Internet to recruit workers for administrative jobs in the state's public colleges.

"What it will do is save the amount of newspaper advertising we have to buy. Instead of a big, huge ad with all the details, we'll be able to consolidate it into a smaller ad that says here's the job, go to the Internet to learn more about it," said Sara Wilson, the department director.

An Internet-based system by which the state can procure goods and services is projected to save $4.9 million, largely by automating the administrative chores and the costs of handling paper procurement forms involved in the process.

"It reduces the need to create paper purchase orders and provides a one-stop location … for vendors," said Bette Dillehay, the deputy secretary of technology. By streamlining and digitizing the complex procurement process, an agency can go from identifying what it needs to obtaining what it needs totally by computer, she said.

Mr. Gilmore appointed Miss Dillehay last summer to lead an effort to computerize as many functions of government as possible, allowing people and businesses to use the Web to handle such tasks as renewing license plates, paying taxes or applying for permits.

Not all savings are in the millions of dollars.

Attorney General Mark L. Earley's office allows staff attorneys to have as many hardbound volumes as they wish of the "Code of Virginia," the thick book of state laws. The whole thing is on the Internet, however, and Mr. Earley wants his staff lawyers to make greater use of it, sharing the printed copies where needed. The anticipated savings: $20,000.

"What we're doing is reducing the amount of paper handling that's going on and that cuts costs in a lot of ways," Miss Dillehay said.


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