The outlines of the spending cuts that Gov. Timothy M. Kaine has in mind to close a looming $3 billion revenue shortfall in the $77 billion biennial budget are coming into view.
As Jeff Schapiro reports in the Times-Dispatch today, Kaine will focus on controlling state payroll, which runs about $5 billion annually (or $10 billion over two years). The commonwealth could save $250 million by canceling 2 percent pay raises for state employees this year and next. Layoffs are an option, but the savings are offset by expensive severance benefits to state employees. I’m betting that vacant positions will remain unfilled, with reductions to be made through normal attrition.
The state can tap another $400 million or more in the rainy day fund, and it can finance some construction projects by borrowing money instead of paying cash. (Whether that option makes sense in today’s financial environment, however, may be debatable.)
The Governor has set an example to the rest of the state administration by finding $900,000 in cuts from the Executive office budget this year and $1.4 million next year. The second-year cuts will amount to 10 percent of the office budget. And that’s on top of $667,000 in cuts from previous initiatives.
According to a press release, cuts in the Governor’s Office include elimination of 8 positions through layoffs and turnover, trimming the grocery bill for “official events” by 25 percent, reductions in travel on state business, cuts in staff cell phone costs, newspaper subscriptions and travel, sending more invitations by email instead of snail mail, and smaller dry cleaning bills for linens at special events. You know the Governor’s Office is getting serious when the order goes out: No more bottled water.
Bacon’s bottom line: Emergency measures are fine for emergencies, which the current budget crisis clearly is. But the culture of state government is such that the costs inevitably creep back ito the system. The Warner administration cut hundreds of jobs, but a few years later, state employment levels hit new highs. In other words, there were few long-term gains in productivity that allowed the state to do the same work with fewer employees. Imposing temporary austerity measures is no way to run an organization for long-term efficiency.
The commonwealth has many smart, highly motivated employees. I’ve met them. They’d be an asset to any organization. But state government has lots of deadwood, too, which no one seems able to root out. I have friends who work as contractors for state government who tell stories, which should horrify tax-paying citizens, of nincompoops in do-nothing jobs. Stae workforce productivity remains a huge issue.
Have you seen any new restructuring and reform initiatives lately? Does anyone know which of the restructuring initiatives of the Warner administration have been completed? It does little good to slash costs for a year or two then return to Business As Usual. State government needs to find ways to drive costs out of the system permanently.
Gov. Kaine will have more to say about state spending priorities later today. His personal parsimony sets a good example. But tax-paying Virginians deserve a lot more.