- The Washington Times - Tuesday, February 17, 2009

Virginia Gov. Tim Kaine said Monday that the state will use money from the federal stimulus package to offset a recent increase in the budget shortfall and prevent further cuts to an already trimmed budget.

“We’ve done the cutting that we need to do in the near term,” said Mr. Kaine, a Democrat.

The shortfall would have gone from roughly $3 billion to $4 billion. Mr. Kaine said Monday that sharp declines in the state’s revenue collections forced another reduction - roughly $820 million - in the general-fund revenue forecast.

But the governor - who as Democratic National Committee chairman has worked extensively to promote President Obama’s stimulus package - said the legislation approved Friday by Congress allots Virginia more than $1 billion, which will more than fill the new gap.

The state will receive roughly $808 million for Medicaid and $216 million to help it “meet critical funding needs” in fiscal 2009 and 2010, Mr. Kaine said.

“Just on those two items of the stimulus, we cover any need for additional downward adjustments and put about $200 million-plus back into the Virginia budget,” he said.

Mr. Obama, a Democrat, is expected to sign the $787 billion package this week.

The federal funding will prevent state lawmakers from having to trim more from Virginia’s $77 billion biennial budget, which has already had cuts in such crucial areas as health care and public education.

Mr. Kaine said lawmakers must scrap changes to the state’s Medicaid spending that he previously proposed, such as placing an enrollment cap on a program serving the elderly and disabled, for Virginia to receive the full amount of increased federal funding.

Mr. Kaine said the legislation’s tax cuts and infrastructure investments also should provide a boost to Virginia’s finances. But officials still need time to determine how much funding other aspects of the act will bring to the state.

Details about the infusion of federal money should help Virginia lawmakers during their current budget deliberations.

The Republican-controlled House last week passed its proposed revisions to the spending plan, while the Democrat-dominated Senate delayed its budget process until Wednesday amid uncertainty over the revised revenue estimates and federal stimulus funding.

The funding also will provide financial aid to Maryland, which is facing a budget shortfall of roughly $2 billion, and to the District, which is facing a $456 million shortfall. Maryland Gov. Martin O’Malley, a Democrat, has said the state can expect roughly $3.8 billion from the recovery act. D.C. officials last week said they expected roughly $1 billion from the House version of the bill.

“What we now have is a better picture of what we have to spend in terms of the revised revenue and … a pretty strong indication of what the stimulus package will mean for Virginia,” said Sen. William C. Wampler Jr., a Bristol Republican and budget conferee who had pushed for the Senate to postpone its action on the spending plan.

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