Published: October 09, 2008 08:36 pm      

Kaine cuts jobs, funding

BLAND, Va. — The economic crisis that has dominated Wall Street headlines in recent weeks has trickled down the Valley of the Virginias and is now impacting the Commonwealth of Virginia.

Gov. Timothy M. Kaine ordered 570 state employee layoffs on Thursday, cut community college funding by 5 percent and postponed implementation of employee raises to deal with a $2.5 billion fiscal crunch brought on by a slow-down in tax revenues.

“Nationally, we don’t know where the bottom is,” Kaine told the Associated Press at a news conference in Richmond, Va., on Thursday. “All we can do is make the real decisions in real time, not putting it off until later to keep this budget in balance and protect the services that are most critical.”

Kaine’s announcement on Thursday only addresses the anticipated shortfall in the 2008-’09 biennial budget. The AP reported that Kaine anticipates proposing more cuts when he introduces budget amendments prior to the start of the 2009 session of the General Assembly. More than half of Thursday’s layoffs — 330 employees — are from the six prisons Kaine ordered closed.

“The cuts will be felt here in the Southwest,” State Senator Phillip P. Puckett, D-Russell said. “Camp 31 (in Gratton, Va., near Tazewell, Va.) and the Day Report Center in Tazewell will be closed. We don’t know how many correctional officers and others will lose their jobs.” Puckett added that the Pulaski County, Va., prison camp will also close.

“The Virginia Wilderness Institute (in Oakwood, Va.) will lose its state funding,” Puckett said. “I know that the institute receives additional funding, but I don’t know if it will be enough to keep them going.

“It’s going to be a rough six months,” Puckett predicted. “The governor can make these cuts immediately, but the Senate and House will have to deal with additional cuts when we consider amendments during the second year of this biennium. The inmates at these facilities do a lot of work in the communities. It will make it more difficult for the communities. It’s just not a good time.”

“The governor of Virginia is required by law to work with a balanced budget,” U.S. Rep. Frederick C. “Rick” Boucher, D-Va., said. “He’s doing his job. I’m hopeful that the legislation we passed last week will restore confidence in the economy. That confidence will determine whether or not the problem will deepen.”

Boucher, who was in Bland County to announce federal funding for an economic development project, said that U.S. Department of Treasury Secretary Henry M. Paulson Jr., has taken additional steps to stabilize the economy by getting the credit situation back in line. Boucher said that without taking steps, to reestablish stability, “these events can have a cascading effect on the economy.

“The legislation we passed is an effort to reverse the trend and get credit flowing again,” Boucher said. “If it is successful, we can see the result in the near future. I have confidence in Secretary Paulson and I think we’ll soon see improvement.”

Dr. Mark Estepp, president of Southwest Virginia Community College said it’s too early to tell what the total impact will be. “It’s still all being stirred up,” Estepp said. “It looks like we’ll have to take a 5 percent cut, while four-year institutions may be facing a 7 percent cut.

“I appreciate that the governor appreciates the role that community colleges play, but that is still a significant cut on the heels of the 5 percent cut we had last year and a lot of new unfunded mandates we have to deal with now.

“Everything has gone up,” he said. “We are anticipating that our energy costs will be $250,000 higher than we expected this winter. We also have a significant decrease in our buying power. We’ve had a triple whammy. I can say we’ve cut off all the meat and we’re down to the bone, but it’s really worse than that,” Estepp said.

– Contact Bill Archer at barcher@bdtonline.com