Governor McAuliffe announces actions on budget shortfall

RICHMOND, Va. – Governor Terry McAuliffe discussed the Virginia’s Fiscal Year 2016-2017 budget Thursday, which includes a $268 million budget shortfall.

“The budget actions we are taking today respond to the Commonwealth’s revenue shortfall without making program cuts to core priorities that are essential to our efforts to build a new Virginia economy,” said Governor McAuliffe. “There will be no program cuts to public education, Medicaid for our families most in need, nor our core public safety services.”

The governor says sequestration and federal cuts are the main reasons for the shortfall.

McAuliffe said 286 open positions with the state will not be filled and 26 state workers will be laid off, most of whom work for the library of Virginia.

The administration will also use $43.3 million in additional unspent fund balances from the end of fiscal year 2016 to reduce shortfall.

Other strategies to close the shortfall  include a suspension in changes to the accelerated sales tax program, transfers of lottery revenues for public education, and the use of Literary Fund revenues to offset teacher retirement costs.

In August, McAuliffe announced that the Commonwealth of Virginia faced a projected budget shortfall of $1.2 billion.