- The Washington Times - Tuesday, February 12, 2002

RICHMOND State revenue collections fell more than $300 million short in January from a year earlier, pushing the state's expected deficit to $3.8 billion in the next three years and forcing hundreds of layoffs, Virginia Gov. Mark Warner said yesterday.
Last month's tax collections plunged 9.1 percent compared with levels a year earlier, and have in the same time frame pushed the state's year-to-date revenues down 1.7 percent. The dive also means that some state agencies may be cut or consolidated, he said.
Mr. Warner said the dismal economic news would force the state to cut about 2,100 positions, most of them through attrition but about 700 of them through layoffs.
It also means that colleges will have to support themselves better through tuition increases. Although he agreed to thaw the freeze on tuitions and allow state-supported colleges and universities to raise rates by 5 percent annually, Mr. Warner said he was prepared to allow even sharper increases.
He said the January finance numbers were particularly distressing because January's figures include the bulk of Christmas season sales. They also reflect the last major filing of estimated taxes from wealthy people.
Mr. Warner said January's results pointedly end the boom in high technology and stocks that generated huge surpluses for the state treasury for several years through 2000.
January's large downturn and the languid state of the economy project hardship for the state through the next two years, the governor said. The revenue estimates will be reduced by $231.1 million for the current fiscal year that ends June 30, by $208.8 million for fiscal 2003 and by $176 million in fiscal 2004, the governor said.
"That means there will be significant cuts," Mr. Warner said.
He said Virginians are only now beginning to grasp the scope of the fiscal pain that awaits them. He is in the midst of a statewide series of appearances to warn people to expect difficult days ahead.
"You're going to see it in the increased fees the state charges, you're going to see it in longer lines at [the state Department of Motor Vehicles]. Arts and cultural organizations are going to see it in reduced hours. You're going to see it in the way people interact with state government.
"You don't absorb a $3.8 billion shortfall over 29 months without there being some pain," he said.
The bad news comes as the House and Senate begin the hard work of forging a budget that not only reconciles shortfalls this year but also lays out the state's spending blueprint through June 2004.


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