Is Virginia’s FY 2008 budget picture bleak enough to justify dipping into the state’s $1.3 billion rainy day fund? Apparently, Gov. Timothy M. Kaine wants to keep that option on the table. Last month the Governor announced that Virginia was facing a cash shortfall of $641 million and ordered state agencies to cut their administrative budgets by five percent. The General Assembly leadership of both houses is urging Kaine not to touch the Rainy Day Fund, which was set up to weather major emergencies like the recession of 2002.

In the letter to the Governor, four senior Republican legislators wrote:

Key economic indicators such as employment and wage and salary growth, while softening, appear to be in line with long-term-trend growth of a maturing economy. Unlike the recession of earlier this decade, when the state actually collected less revenue, the updated revenue forecast presented by [Finance] Secretary [Jody] Wagner indicates Virginia revenues are still experiencing growth.

“We remain concerned that utilizing the state’s Rainy Day Fund during a non-recessionary period establishes a bad and undesirable precedent that suggests we can overspend taxpayer resources without consequence,” the legislators wrote. They offered few specifics on where Kaine should implement his spending cuts, but did urge him not to reduce state support for higher education while expanding the pre-K program, which would be “tantamount to raising tuitions on middle-class Virginians in order to launch a new initiative.”

Kaine spokesman Kevin Hall called the letter a political stunt, reports Pamela Stallsmith with the Times-Dispatch. “While they play political games in an election year, the governor and his team are busy making difficult choices about painful cuts in services Virginians rely on.”

Perhaps Hall didn’t like the legislators’ insinuation that the budget crunch was partly of the Kaine administration’s own making. Half the shortfall, they wrote, could be attributed to underestimating payments for the Land Preservation Tax Credit and miscalculating interest payments to the General Fund. On the other hand, Kaine deserves credit for seeking spending cuts early in the fiscal year, when cost-cutting decisions can be spread over 10 months.

Politics aside, the legislators are right: There is no justification for tapping the Rainy Day Fund during a period of economic expansion.