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Virginia Agencies Prep For More Budget Cuts

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Fresh off his overseas trade mission to India, Virginia Gov. Bob McDonnell (R) met with a group of public and private sector leaders to help gauge the state's economic activity this week. Indicators suggest McDonnell will use a cautious approach in crafting his budget for the coming year.

For 19 of the past 20 months, state revenues surpassed those from last year in Virginia, but officials are saying they won’t be sufficient for rising costs in public education, Medicaid, and the state pension fund. McDonnell says other challenges will also have an impact. 

"Just returning from an overseas trip, I certainly can tell you that the rest of the world is concerned about the U.S. economy, is concerned about the unpredictability and uncertainty that’s coming out of Washington," McDonnell says. 

The failure of the Congressional super committee tasked with cutting $1.2 trillion from the federal deficit didn't help matters, McDonnell adds.  

None of the economists his administration has consulted has a rosy outlook,  according to the governor. "There were seven of them that recommended the standard forecast, five that chose the 'standard-minus,' and two recommended the recession scenario for the U.S. economy," McDonnell says.

Some officials say budget cuts will be needed, but those cuts will likely be targeted and not across-the-board. Agencies have been preparing budget reduction plans that cut anywhere from 2-4 percent. McDonnell unveils his budget in December.

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