THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Tuesday, December 20, 1994 TAG: 9412200351
SECTION: FRONT PAGE: A1 EDITION: FINAL
SOURCE: BY DAVID M. POOLE, STAFF WRITER
DATELINE: RICHMOND LENGTH: Long : 151 lines
Gov. George F. Allen on Monday proposed taking a meat cleaver to virtually every state program - from grants to local police departments to subsidies for public television - to make the first down payment on his prison-building program. He also promised a $2 billion tax cut.
Allen warned General Assembly Democrats that their failure to go along with his plan to trim $400 million in spending from the 1995-96 state budget could earn them the wrath of voters in next year's legislative elections.
``I have made the necessary hard choices,'' Allen said. ``Next month will be time for you to choose: the status quo or an exciting new era of freedom, opportunity and responsibility for Virginians.''
The Democrat-controlled money committees were deferential to the Republican chief executive, who appeared before a joint meeting of the committees to present his amendments to the state's two-year, $32 billion budget.
They gave Allen a standing ovation when he entered and exited the crammed hearing room, then pounced on the advisers he left to defend budget recommendations.
Democrats said they were all for the notion of tax relief, but questioned whether the state could afford losing $2 billion over the next five years.
Del. David G. Brickley of Prince William County - sitting in for House Finance chief C. Richard Cranwell of Roanoke County - cautioned that cutting state income taxes could shift the tax burden onto local government.
``We cannot be compared to New Jersey,'' Brickley said, referring to a tax cut in that state that resulted in large increases in local real estate taxes.
House Appropriations Committee Chairman Robert B. Ball of Henrico County questioned the wisdom of cutting taxes at the same time the state is preparing to go into debt to build prisons to handle a surge in inmates caused by Allen's no-parole policy.
Allen's finance secretary, Paul Timmreck, and budget director, Robert W. Lauterberg, described the spending plan as the vehicle for making good on Allen's campaign promise to reduce the size of state government by curtailing or eliminating unessential programs.
Allen would force government onto a diet by eliminating $149 million in revenue for the fiscal year that begins July 1.
The money would stay in the pockets of individual income taxpayers and businesses, both of which would see their tax burden gradually decline over the next five years.
Some programs would be free to grow.
The Department of Corrections, which will have to house an inmate population pushed upward by Allen's no-parole policy, would see its budget rise by $92 million next year. Allen also wants to build another 8,100 prison beds by borrowing $175 million early next year and asking voters in November to approve another $227 million in debt.
Allen would reduce original cost estimates for building and operating the new prisons by relying on private contractors to provide another 10,000 beds over the next 10 years.
To make up for the tax cut and prison costs, Allen has proposed some $400 million in spending cuts in the next year. Most of the savings would be painless: Medicaid costs will be lower than expected next year; there will be fewer children than expected in public school systems; state accountants will conjure a one-time savings by drawing down state employee health insurance reserves and selling off a state loan portfolio.
Still, Allen had to propose about $150 million in real cuts, including the elimination of nearly 1,100 state jobs through pink slips, attrition and early retirement offers of up to six months of pay.
Most of the remaining cuts are spread out over scores of agencies and programs.
Some of the money would come at the expense of powerful Democrats' pet projects - such as $100,000 from the Virginia Air and Space Museum in the district of Senate Finance Chairman Hunter B. Andrews, D-Hampton, and $200,000 from the Explore Park near Roanoke in Cranwell's district.
Allen, however, spared the foundation that is restoring Poplar Forest in Bedford County, the second home of Thomas Jefferson, whom Allen quotes in nearly every speech.
Democrats said many portions of Allen's budget appear to be in conflict.
He would beef up tourism promotion, yet cut by one-half funding for museums, which are often local tourist destinations. He would go on a prison-building spree while cutting grants to local police departments by nearly 10 percent.
Roanoke, for instance, stands to lose $164,000 in state law enforcement grants next year and Norfolk stands to lose $615,000.
Del. Marian Van Landingham, D-Alexandria, accused Allen of ``glossing over'' the human cost of his plan to cut programs designed to help the disadvantaged.
She said many of the Republican's proposed cuts appear to be motivated by a conservative ideology without any understanding of how they would affect communities and families. It is troubling, she said, that Allen would talk of ``empowering'' poor people and then seek to cut money from a program that helps at-risk students set their sights on college.
``It goes against the rhetoric and ideology of this administration,'' Van Landingham said.
Andrews, the powerful Senate Finance chairman, pressed Allen administration officials to provide details of budget cuts he proposes for future years as the proposed $2 billion is phased in.
``The people are entitled to know what the cuts will be,'' Andrews said.
Jay Timmons, Allen's chief of staff, later called Andrews' request ``bogus'' because the General Assembly often has cut taxes or raised revenue without explaining in detail how it would pay for it in future years.
``They're never provided that blueprint,'' Timmons said.
Some Democrats wondered aloud whether Allen really wanted to pass a tax cut.
``Does he really want us to pass this tax reduction bill or do does he want some of us to try to kill it and then beat us over the head with it when we run for re-election?'' asked Sen. Richard J. Holland, D-Windsor.
The entire legislature, currently weighted slightly in favor of Democrats, comes up for election next fall. MEMO: [For a related story, see Norfolk TCC WOULD BE CUT; SPARKS FLY also on
page A1 for this date.]
ILLUSTRATION: IN ALLEN'S PLAN:
[For a copy of the graphic, see microfilm for this date.]
[Color photo of Governor Allen]
[Color Photos]
SOME LOCAL AREAS AFFECTED
Tidewater Community College's downtown Norfolk campus:
Allen would eliminate the project, now under way, for a savings of
$1.25 million. The SMith & Welton building, above, is being
renovated for school use.
Virginia Zoological Park:
Funding would be reduced for the zoo's education program, for a
savings of $30,000.
Virginia Air and Space Museum:
Funding would be reduced, for a savings of $100,000.
BUDGET HEARINGS
Next week, the Senate Finance and House Appropriations committees
will begin public hearings on Allen's recommendations.
In Hampton Roads, the panels will convene at 10 a.m. Jan. 5 at the
Phi Beta Kappa Memorial Hall at the College of William and Mary.
KEYWORDS: BUDGET TAX CUTS by CNB