There may be signs the economy is improving, but Virginia Gov. Bob McDonnell says “the time for belt tightening is far from over” and state employees may have to face layoffs and go without pay raises over the next two years.
McDonnell, who heads the Republican Governors Association, made the comments in a radio interview last week with Richmond station WRVA.
McDonnell said layoffs and pay freezes could both be part of the forthcoming two-year budget proposal he plans to submit to the state legislature on Dec. 19.
McDonnell said in the radio interview that he has asked Virginia agency heads to submit their own proposed spending cuts by close of business Monday. He is also looking for targeted savings from the state’s two costliest programs — Medicaid and public education.
Asked specifically about the prospect of layoffs, McDonnell said, “I hope not,” and noted most of the 2,300 state government job losses that have occurred since he took office in January of 2010 happened primarily “from attrition.”
But he added, “This is obviously a very tough economy and we’re looking for as many other ways as we can to create efficiencies. But if we have agency eliminations or consolidations there may be some change in the workforce.”
In response to a caller wanting to know about the possibility of a cost-of-living increase for state workers, McDonald said he was “very concerned” about what he called “the unpredictability of what’s going on in Washington and its impact on our revenues.”
He told the caller, a state employee, “I will do the best I can to take care of you, your family, and others, but there are still uncertain times ahead, and I don’t believe we’re going to have a sustained pay increase this year.”
McDonnell’s comments were not unlike those that have come recently from other governors, whose states are facing serious budget problems.
Virginia in many ways is much better off than most. The state finished the last fiscal year with a $544 million surplus, according to the Richmond Times-Dispatch
, but it did not come without expense.
Virginia withheld $620 million in state retirement system contributions last year to balance the budget, according to the Times-Dispatch. And McDonnell has indicated that it may be necessary to reduce benefits to help shore up the system.
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