City leaders expect Kaine to announce funding cuts

BRISTOL, Va. – Any mid-year budget cutbacks from the state could impact the city more than its school division, officials agreed Monday.

Gov. Tim Kaine is expected to announce funding cuts in the coming weeks, Mayor Jim Rector told the City Council and School Board, during their joint quarterly
meeting.

“We just had an update at VML [Virginia Municipal League],” Rector said. “If what they’re telling us is correct, it could be a struggle. They said different parts of the [state] budget will see some reduction, and it could be as much as 13 percent.”

During the current fiscal year, the city is scheduled to receive about $20 million from the state, as part of its $50 million general fund operating budget.

Word is expected soon, Rector said, since the governor is scheduled to formally present his last biennial budget in mid-December.

“We know they’re [cuts] coming. We just don’t know where and when and what,” Rector said after the meeting. “As we receive information, the City Council may have to make some adjustments.”

Those adjustments, the mayor said, could include everything from furlough days for employees to layoffs or reduced services.

It’s been a difficult revenue year for the city, with tax collections in nearly every category tracking below projections.

City leaders recently borrowed a $500,000 tax anticipation note to help pay its expenses until real estate tax revenues begin coming in, city Comptroller Steve Allen said.

That is in addition to a $1 million tax anticipation note borrowed in September. In both cases, the short-term borrowing must be paid back from tax collections.

“Tax notices went out last Thursday and are all due by Dec. 5,” Allen said. “Everything has been tracking low, but last month, local sales tax spiked upward.
We’re still not sure why.”

The Virginia School Boards Association predicts any mid-year funding cuts will likely spare school budgets, but they could experience significant changes for fiscal 2010-11, Superintendent Ina Danko told the group.

“We’re hearing the [federal] stabilization money the state received could be shifted to support basic K-12 funding for next year – which means we couldn’t access it for renovation or capital improvements,” Danko said.

There also appears to be some sentiment in Richmond to trim future funding for school support workers, Danko said.

“If the General Assembly goes along with that, it could be a huge issue for us,” Danko said.

The division currently employs about 80 support personnel, but receives state funding for 62. If one proposed formula is adopted, the state might only fund 40 such positions, Danko said.

“If that happens, then the board would be faced with finding that funding or making personnel cuts,” she said.

| (276) 645-2532