Governor Timothy M. Kaine announced the revised revenue forecast for fiscal years 2008 through 2010, as well as a budget reduction plan designed to deal with the shortfall in state revenue brought on by the national downturn in the economy. The shortfall for the remainder of fiscal year 2008 through 2010 totals nearly $1.4 billion.

The Governor’s proposed strategy to meet the shortfall includes increased use of the Revenue Stabilization Fund, targeted reductions to the Governor’s initiatives and other programs, percentage cuts to executive agencies, and bonding of capital projects. Kaine’s plan does not include tax increases.

“Since the November 2007 revenue forecast, the national economy has dramatically slowed,” Kaine said. “While Virginia can weather economic downturns better than most states, we are not immune. In the past week, we have gathered the most recent data and met with our leading economists, representatives of the private sector, and state legislators. The revised consensus revenue forecast indicates that we are now facing an additional shortfall of nearly $1.4 billion over the remainder of fiscal year 2008 and the 2009-2010 biennium.”

For the years 2009-2010, Kaine recommends continued percentage cuts to executive branch agencies at two percent for higher education and three percent for all other agencies. His proposal also includes a one percent reduction in proposed salary increases for state employees and teachers.

For more information, the Governor’s Recommended Budget Reductions plan is available at: www.governor.virginia.gov/Initiatives/Legislation2008/CombinedPlan02-12-08.pdf.