- The Washington Times - Wednesday, November 28, 2001

Virginia Gov. James S. Gilmore III said yesterday the recession could force the state to dip into its rainy-day fund to help balance the state's biennial budget.
"Everything is on the table, because we are dealing with a very serious recession," Mr. Gilmore said on "Ask the Governor," a radio program on WTOP, though he also said it is too soon to make those kinds of decisions.
The rainy-day fund, a cushion for tough economic times, currently has about $1 billion in it.
"In Virginia, the economic downturn was exacerbated by the September 11 terrorist attacks, so we have a substantial issue we have to deal with here in terms of the budget," Mr. Gilmore said.
Mr. Gilmore has said the attack on the Pentagon and the subsequent three-week shutdown of Ronald Reagan Washington National Airport were devastating to the state's economy.
The Republican governor also warned listeners about the severity of the recession and its impact on the upcoming budget, which he will present to three state money committees Dec. 19. Mr. Gilmore leaves office Jan. 12.
One item that will not be included in the governor's budget is the full phaseout of the car tax, which was expected to take place next year. Mr. Gilmore and state financial officials said this month Virginia lost $1.2 billion in revenues this year so it couldn't afford to advance the rebate to 100 percent.
The car-tax rebate will stay at 70 percent next year, and Virginia residents will continue to pay 30 percent of the tax on the first $20,000 of a car's value.
"People should not underestimate the seriousness of the recession," Mr. Gilmore said. "This is a real downturn and it is a real budget challenge."
Gov.-elect Mark R. Warner, a Democrat, will be allowed to make changes or add amendments to Mr. Gilmore's budget once he is sworn in Jan. 12.
Also yesterday, Mr. Gilmore defended his party's losses in the Virginia and New Jersey governor races, saying both Democratic candidates ran conservative-type campaigns.
"When they run as Democrats they lose," Mr. Gilmore said. "When they run as Republicans, they're winning."
Mr. Gilmore also said Mr. Warner's victory is no big win for Democrats in Virginia.
"Mark Warner ran as a fiscal conservative he set up a conservative, Republican-type tone, and that's why he won the election," said Mr. Gilmore, who chairs the Republican National Committee. "It's certainly not a victory for the national Democratic platform."

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