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A Project of The Annenberg Public Policy Center

GOP Attack on Tim Kaine’s ‘Shortfall’ Falls Short

A conservative group claims former Virginia Gov. Tim Kaine “left us with a $4.2 billion shortfall.” Not exactly. The state did face a $4.2 billion gap in the biennial 2010-2012 budget, but Kaine submitted a balanced budget proposal days before leaving office, as required by law.

And the last budget Kaine signed into law ended with a surplus. In fact, Republican Gov. Bob McDonnell praised Kaine for making “tough cuts” in state spending and relying on “conservative” revenue forecasts in the 2008-2010 biennial budget that helped the state end fiscal year 2010 with a $403 million surplus.

McDonnell rightly credited “two administrations” for the surplus, since fiscal year 2010 started under Kaine and ended six months later under a McDonnell administration.

Surplus to Shortfall?

Americans for Prosperity, a conservative 501(c)(4) nonprofit founded by businessman David Koch, began airing the TV ad on Aug. 22. It’s titled “Smarter Spending Not Higher Taxes,” and accuses Kaine of proposing tax hikes and turning a budget surplus into a budget deficit.

Democrats and Republican alike have now misrepresented Kaine’s role in the state budget process to make partisan points. As we wrote about once before, a Democratic super PAC gave Kaine too much credit in claiming that Kaine “cut” $5 billion in state spending, when in fact he cut $3.5 billion and proposed another $2 billion or so shortly before leaving office. As we noted, Kaine cannot be given credit for cuts he merely proposed but did not enact.

This time, a GOP-aligned group says, “Tim Kaine inherited a surplus, but left us with a $4.2 billion shortfall.” That goes too far in the other direction.

Kaine did what the law required, leaving the state with a blueprint for dealing with a problem that is common in state government finances.

It’s not uncommon for a governor to leave office with his or her state facing a shortfall in the next budget, because most state budgets contain non-recurring revenue. That was particularly true in fiscal year 2011 because federal stimulus funding was drying up and states were still reeling from the Great Recession.

But Kaine didn’t just walk away leaving Virginia holding the bag.

Under Virginia law, the governor must submit a biennial budget on or prior to Dec. 20 every two years — even if he or she will not be in office to sign that budget bill into law. Virginia is unique in that respect.

Kaine, who was governor from January 2006 to January 2010, submitted a biennial budget for fiscal years 2011-2012 on Dec. 18, 2009. A Daily Press story on the budget that appeared a day after the budget introduction explained that the state faced a $4.2 billion budget gap and Kaine proposed cuts of $2.3 billion.

Daily Press, Dec. 19, 2009: Outgoing Gov. Timothy M. Kaine handed down a dire two-year state spending plan Friday packed with hundreds of layoffs and billions of dollars in cuts and missing the $950 million the state usually doles out to localities as car-tax relief.

Facing a $4.2 billion revenue shortfall for the 2011-12 state budget, Kaine cut $2.3 billion from public education, health care, universities and law enforcement. But Kaine balked at deeper cuts, opting instead to propose halting the annual payments the state makes to bring down personal property tax bills on cars, trucks and motorcycles.

Less than a month later, Kaine left office and McDonnell took over on Jan. 16, 2010.

It’s true that McDonnell and the legislature amended Kaine’s budget. As the Washington Post explained when Kaine submitted his budget plan: “McDonnell and legislators will use Kaine’s plan as a blueprint, but will make alterations based on their priorities and the changing economic forecast.”

And it’s true that McDonnell, not Kaine, signed the budget bill into law and can be rightly held responsible for what’s in it — including the budget cuts that Democrats credit to Kaine.

Still, Kaine started the process of closing the budget gap in the 2010-2012 biennial budget and the last budget he signed into law, the 2008-2010 budget, ended with a modest surplus.

Even McDonnell, a Republican, recognized that Kaine deserves some credit for making “tough cuts” that put the state in position to end fiscal year 2010 a surplus. In August 2010, McDonnell spoke at a joint meeting of the legislative budget committees and said the last budget that Kaine signed into law resulted in a fiscal year surplus of $403 million.

McDonnell, Aug. 19, 2010: This modest surplus and fiscal turnaround was achieved by two Administrations, two houses of the General Assembly, and two political parties. I applaud former Governor Tim Kaine for the tough cuts he made in this budget prior to leaving office. Governor Kaine also exercised conservative judgment in his revenue reforecast in December. Our Administration continued that policy of restraint during this session.

— Eugene Kiely