- The Washington Times - Friday, December 18, 2009

RICHMOND | The austere budget that Gov. Tim Kaine plans to submit will, among other things, scale back the share that state government contributes to Virginia employee retirement plans.

A state official familiar with some portions of what Mr. Kaine will present said that for the first time in nearly 30 years, the state will no longer cover the full 5 percent employees’ contribution to their pension plans.

The official was not authorized to preview the governor’s Friday address to legislative budget committees.

Since the early 1980s, the state has paid its employees retirement contribution. Mr. Kaine will propose decreasing it to 4 percent starting July 1, then to 3 percent starting July 1, 2011.

The change is the result of excruciating choices forced upon Mr. Kaine in coping with a projected $3.6 billion revenue shortfall for the new two-year budget, which takes effect July 1.

Mr. Kaine has already cut about $7 billion from the existing budget because of what the worst economic downturn since the Great Depression has wrought on Virginia’s state tax collections since 2007.

Other items the official said Mr. Kaine will include in his spending plan presented to the House Appropriations Committee, and House and Senate Finance committees include:

- Providing $12 million each of the next two fiscal years for the Governor’s Opportunity Fund, the account that chief executives use as a tool in recruiting new or expanding companies to Virginia. By including the money, Mr. Kaine, a Democrat, gives Gov.-elect Robert F. McDonnell, a Republican, a fully stocked arsenal that he can begin using when he is sworn in Jan. 16 in advancing his goal of bringing jobs to the state.

- Eliminating the sliver of the retail sales and use tax that merchants were allowed to keep for generations for their trouble in collecting and remitting the tax. Mr. Kaine has said computerized business systems greatly decrease the headaches that retailers endured in turning the revenue over to the state’s Department of Taxation each month. But the state’s retail merchants association contends that the move will pose a hardship to stores at a difficult time. The state expects to gain $60 million to $70 million in additional revenue.

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