- The Washington Times - Friday, March 9, 2001

RICHMOND Virginia Gov. James S. Gilmore III said yesterday he won't have to dip into the operating expenses of public colleges and universities to close the state's budget deficit.

He had asked colleges and universities to identify more than $100 million in cuts to operating expenses, but has concluded he can free up enough other money to avoid dipping into higher-education money. That also means there will be no layoffs for college and university employees, he said.

"We have fulfilled what my desire was, which was to make higher education a top priority, together with [kindergarten through 12th-grade] education, and at the same time manage this budget the way that would give the appropriate tax relief and keep our pledge to the people of Virginia," the Republican governor said.

The announcement comes a day after he exempted the Department of Transportation from spending cuts, and is yet another sign of the governor's confidence he can close the $421 million deficit in the $50 billion budget passed last year. The budget covers July 2000 through June 2002.

The Republican-controlled General Assembly adjourned Feb. 24 after failing to agree on amendments to the budget, deadlocking over the size of the governor's signature rebate on the car tax. The House agreed with the governor's schedule to move the state's share of the rebate from 47.5 percent to 70 percent this year. The Senate has proposed only a 55 percent rebate.

That has left Mr. Gilmore with the responsibility of balancing the budget with revenue coming in at lower levels than originally expected. Thus the two-year budget has a $421 million hole, including $189 million in the first year.

The governor still wouldn't talk about specific cuts he will make, but given the shrinking pool of possibilities, it's clear he will take a big chunk out of capital improvements. There are $405 million of capital projects in the budget that are not under contract. Some of those projects, such as fire-sprinkler systems, have to go forward, but the governor said relying heavily on frozen capital projects is the tradeoff he has to make in order to avoid cutting operating expenses.

The governor also has identified slightly more than $100 million in unspent cash in the two-year budget that he can now transfer to other agencies.

Public support for the governor slipped when he announced the first specific cuts he was considering the objectives he gave to public colleges and universities.

The governor has now exempted higher education's operating expenses, transportation, health and human services agencies and direct spending on public education all things he has claimed as priorities throughout his administration.

Northern Virginia Community College President Belle S. Wheelan said she was happy to hear the news, because the alternative would have been to eliminate some of the courses the school offered.

Still, she and the other community colleges probably will be hit hard by whatever the eventual decision is on freezing capital construction. Construction on campuses made up more than 70 percent of the $405 million in potentially available money from construction projects.

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