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September 3, 2008

Press Release: Martinsville Bulletin

Wednesday, September 3, 2008


The New College Institute and the Virginia Museum of Natural History in Martinsville are bracing for possible state budget cuts.

Gov. Tim Kaine's administration on Tuesday ordered heads of state agencies to prepare separate blueprints for cutting their operating costs by 5 percent, 10 percent and 15 percent.

The order was in response to a decline in state tax collections and steadily slowing economic growth in the state.

Barry Dorsey, executive director of the institute, said Tuesday night that he had not yet received the order and was not aware that it was coming.

Dorsey said he was aware that state budget cuts are possible. However, he said he understood from state officials that "their intent was to preserve the integrity of higher education institutions as much as possible."

Therefore, he does not yet know if the institute will be affected, he said.
The museum already knew the order might be coming and had prepared plans for reducing its spending by those percentages, according to Ryan Barber, director of marketing and external affairs.

Barber said the plans involve matters such as reducing the museum's use of energy and phone service. He added that departments were asked to look at other possible savings they might achieve, such as in buying supplies.
Reached Tuesday night on his cell phone, Barber said he did not immediately have access to the plans.

Tim Gette, executive director of the museum, could not be reached for comment.
The mandated reductions represent the third round of state spending cuts imposed since last October.

The administration warned in July that major sources of state revenue, including income and sales taxes, were not meeting projections on which the state budget is based.

Tuesday's memo from Kaine's chief of staff, Wayne Turnage, was the first indication of how deep they might be once the full extent of the shortfall is known by the first week of October.

On July 16, Kaine ordered most hiring frozen and an end to discretionary spending after alarming preliminary revenue figures for the fiscal year that had ended barely two weeks earlier.

Out of a total general fund budget of $17.2 billion for the 12 months that ended June 30, the state finished with just $5.4 million to spare - a cushion of just a fraction of 1 percent.

Continued discouraging results, Turnage wrote, "suggest even more strongly that we will not reach the revenue collections needed to support the current level of appropriation in fiscal year 2009 and fiscal year 2010."

Over the past four months, sales tax collections have grown by only 0.8 percent, far short of the 4.9 percent growth forecast on which the two-month-old current budget is based.

State income taxes withheld from paychecks have grown over that time by 1.6 percent, just one-fourth of the forecast rate of 6.4 percent growth. Income taxes account for nearly three-fifths of the state's total general fund, which supports such core services as public education, public safety and health services.

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