Gov. Timothy Kaine said earlier this week that Virginia’s revenues were $800 million less than expected in December, bringing the budget shortfall to $3.7 billion.
But Kaine said Virginia should receive about $4 billion from the stimulus package President Obama signed this week and that will allow the state to avoid further cuts to its $77 billion biennial budget.
The additional Medicaid funding and other dollars provided in the stimulus bill will put about $1 billion directly in the state’s budget to close the gap, Kaine said. “In the short term, we don’t need to make any additional cuts,” he said.
The stimulus package should also give Virginia about $700 million for transportation projects.
The governor’s budget plan includes a proposal to issue $350 million of tax-exempt bonds as well as plans to tap about $490 million from the state’s rainy-day fund, implement a 30-cent per-pack cigarette tax hike, and cut more than 2,000 jobs.