Gov. asks agencies to prepare for cuts

RICHMOND, Va. (WAVY) - Citing a looming 'fiscal cliff' and rising health care costs, Governor Bob McDonnell instructed state agencies to prepare to cut their budgets by 4 percent.

The announcement came in a memo released Thursday by the governor's chief of staff. The agencies have until the end of the month to tell the governor how they propose to get to the 4 percent target.

Document: Memo from Gov. McDonnell's Office

In the memo, the governor's office suggests agencies look at program consolidation, use of technology, and relief of outdated duties. It specifically tells agencies to cut activities, not personnel. The memo notes the ongoing hiring freeze has already affected the number of state workers.

The governor says this is to prepare for the effects of sequestration and rising health care costs, should Congress not come to an agreement.

"We may or may not know in 30 days, when I have to finish the budget action if Congress has acted and whether the president has gotten things done. I just want to be ready," said Gov. McDonnell. "And so, I've done this every year, people shouldn't get too concerned about it. It's something that I always ask our agencies to do to give us cost cuts and budget saving ideas and it's part of the routine."

Gov. McDonnell says the memo is the next step in the budget process.

"I'm always asking our state agencies and Cabinet members to find ways and generate ideas that will make government more effective and efficient," said Gov. McDonnell, when asked about the memo. "And [they] send them to me so I can consider them in the budget process. I may use some. I may not use any of them."

Around the same time two years ago, for the previous budget, the governor asked agencies to make 2 percent, 4 percent and in some cases 6 percent cuts.

Virginia's universities are not included in the memo, and are not being asked to make cuts at this time.

The memo sent less than two days after Democratic President Barack Obama defeated Gov. Mitt Romney, the Republican candidate, for whom Gov. McDonnell campaigned extensively.

McDonnell spokesman Tucker Martin told WAVY.com the governor hasn't issued any orders to make mandatory cuts yet and the memo was sent in preparation for a possible federal budget stalemate.

"We ask agencies for spending reduction proposals and strategies every year," Martin said. "This year is no different. We are always seeking ways to make state government more efficient and effective. This year in the importance of this exercise is heightened by the unprecedented fiscal uncertainty presented by the looming federal fiscal cliff, and other potential budget issues facing the Commonwealth. We're just seeking ideas for savings at this time, not making final decisions."