Could it be? Is it really possible? Might Virginia’s budget woes be ending? In in late 2007, Virginia’s tax revenues have been declining (along with most of the rest of the country), forcing the incoming administration of Gov. Bob McDonnell to make some drastic budget cuts. To their credit, McDonnell and the General Assembly did this without raising taxes, and now it seems that just rewards are due:
In a troubled fiscal year of persistent shortfalls, Virginia could wind up posting a small surplus by the time the current budget expires at the end of June, state government’s top money officer said Monday.
Finance Secretary Ric Brown said Monday that with a small monthly boost in April tax collections, the state has made consecutive monthly gains for the first time in two years.
“To put this thing in perspective, if we collect in the next two months what we collected in the last two months last year, we would run a $140 million surplus,” Brown told the budget-writing House Appropriations Committee.
While these sorts of projections are never solid enough to be relied upon, the small signs of prosperity are at least encouraging. It seems that tackling budget shortfalls by reducing the size of government, rather than inventing new ways to tax citizens, has the potential to promote economic growth. Who knew? Of course, localities such as Fairfax County will be forced to deal with their own fiscal problems, some of the solutions for which include raising taxes and fees. However, it is entirely appropriate and politically sound, for local matters to be dealt with through local taxes. In fact, the more control left with the local authorities, who are accountable to local voters, the better. After all, one vote in Fairfax County counts for a great deal more than one vote in the entire Commonwealth of Virginia.
So it seems that sound fiscal management of Virginia’s government resources just might successfully steer her through these troubling economic times. Wait, what’s that? Not so fast…
Washington Examiner reporter William C. Flook drops the other shoe:
The McDonnell administration increased its estimate for Virginia’s cost of President Obama’s health care overhaul to about $1.5 billion through 2022, a roughly $400 million jump from the governor’s initial forecast.
McDonnell, at the federal health bill’s passage in March, estimated the legislation would cost Virginia $1.1 billion over the next dozen years by adding as many as 400,000 people to Medicaid rolls.
The upward revision is mostly because of bad news from the federal government on how 80,000 low-income children and teens will be covered under the new law. When the Virginia Department of Medical Assistance Services made the first estimate, it assumed those youths would stay in the Children’s Health Insurance Program, or CHIP, which provides the state with a generous federal match, said Virginia Secretary of Health and Human Resources Dr. Bill Hazel. Instead, they will be enrolled in ordinary Medicaid, which shares its costs 50-50 with the state, federal officials have told Virginia. “In the new plan, [the youths] get converted to standard Medicaid, which means we get a lower federal match, which means it costs us more money,” Hazel told The Washington Examiner.
Great. This is sort of like when the child works really hard at budgeting his expenses and managing his income, finally achieving a respectable balance between the two that prepares him for the future, only to have his profligate parents stop by to let him know that they are going to be defaulting on the gargantuan loan they took out in his name, and if he needs any information about it they can be reached in Las Vegas where they’ll be gambling away the money. Just wonderful.
So say goodbye, dear surplus. We hardly knew ye.
