The $1.5 billion shortfall that McAuliffe will announce today will require the state to tap the Revenue Stabilization Fund, or rainy day fund, to fill an estimated $420 million of the hole in this fiscal year and an additional $210 million in the second.
But first, the administration will have to deposit $605 million in the fund that the governor and legislature included in the two-year budget, and the General Assembly will have to agree to tap the fund when it convenes in January for a 45-day session.
“Any withdrawal has to be appropriated,” Secretary of Finance Richard D. “Ric” Brown said Thursday.
The immediate challenge for McAuliffe will be to cut spending in the current fiscal year to account for a reduction in revenues of about $850 million, most of it from a pessimistic outlook on individual income taxes withheld from payroll.
