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

DATE: SATURDAY, December 3, 1994                   TAG: 9412050037
SECTION: VIRGINIA                    PAGE: B1   EDITION: METRO 
SOURCE: PAUL DELLINGER STAFF WRITER
DATELINE:    DUBLIN                                 LENGTH: Medium

ALLEN: JOB CUTS MAY BE NEEDED

Gov. George Allen agreed Friday that his proposed $2.1 billion tax cut over five years will mean some state employees will lose jobs, but said the state's purpose is to provide not jobs but essential services to its residents.

The reduced taxes will mean more private-sector jobs, which is where job creation should be taking place anyway, he said.

Allen was in Pulaski County to make the first of five annual $1 million payments from the Governor's Opportunity Fund toward a $200 million expansion at Volvo GM Heavy Truck Corp.

Allen called for localities to eliminate the gross-receipts tax, which provides $300 million annually for local governments. He said that particularly would help small businesses - especially those just starting.

Allen said he has been getting a lot of positive reaction to his proposals from workers, including some at Volvo.

"Working people, and especially people with families, love it," he said.

He said the cuts would be handled by reducing the size of the state budget and scaling back state government.

He said he hoped many of the eliminated state jobs could be accommodated by attrition and early retirement incentives. He ordered a state hiring freeze Thursday, which means that employees who retire or leave for other reasons will not be replaced, except in emergencies.

Allen said the state was taking its cue from private businesses, which have used incentive plans to encourage retirement when they had to downsize.

Another key will be turning over to the private sector some tasks now handled by the state, he said. And if all that does not reduce the state work force sufficiently, he said, "we may certainly have to look at layoffs."

But the state's role is not to create jobs where jobs are not needed, Allen said.

"The government is not there as the employer of last resort."

Voters made it clear in the November elections that they want less government and fewer restrictions on private enterprise, he said.

Allen said his priorities as governor are education, law enforcement and economic development. But it may be that even those areas can be operated more economically, and they also could see some job cuts, he said.

He said Virginia already has taken steps toward encouraging economic development, with a major business-facilities tax credit and changes in regulatory policies to include economic impact statements as well as environmental impact.

by CNB