
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, June 29, 1990                   TAG: 9006290738
SECTION: VIRGINIA                    PAGE: B-3   EDITION: EVENING 
SOURCE: Associated Press
DATELINE: RICHMOND                                LENGTH: Medium

STATE AGENCIES TO STUDY BUDGET CUTS

With Virginia facing a possible $300 million revenue shortfall in the next two years, state agency heads are being asked to decide how their budgets could be pared.

State Secretary of Finance Paul W. Timmreck said Thursday he has asked the agencies to submit contingency plans by July 16 outlining the effects of budget cuts of 1 percent, 3 percent and 5 percent in the next two fiscal years.

Agency officials also have been told to look at new programs and other initiatives approved by the 1990 General Assembly and see whether they can be delayed.

Timmreck said Gov. Douglas Wilder is considering cuts of up to 5 percent to cover the projected revenue shortfall and said the contingency plans will "show us what would happen" if the cuts were made.

The general fund budget for the next two years is $13.1 billion, considerably more than the general fund budget for the last two years.

The governor has told the General Assembly's budget committees that he will submit a cost-cutting plan to them Aug. 17.

Most members of the assembly's budget committees say they hope state aid to localities will escape the cuts. The aid, which makes up 57 percent of the overall general fund budget and consists primarily of aid to education, has been exempt from previous cuts.

Wilder announced two weeks ago that the state faces a revenue shortfall of $100 million in the current fiscal year, which ends Saturday.

The state will make up the $100 million by spending a surplus of $37 million and by postponing expenditures until next year. Postponing the expenditures will roll a $130 million shortfall into next year.

Timmreck said he is working on the assumption revenues also will be down $100 million each in both the 1990-91 and 1991-92 years. That would produce a potential shortfall of $300 million.

Cuts in state agency budgets would be on top of 5 percent reductions ordered at selected agencies efforts at the beginning of this year.

The state took steps in December to make up for a $181 million revenue shortfall. Further reductions of $67 million were ordered two weeks later when tax revenues were again below projections.

by CNB