Aid to localities already slashed by $50 million
Virginia groups fighting to preserve programs and spending find themselves bracing for another budget battle after Gov. Tim Kaine announced that sputtering revenues likely will force major cuts to an already beleaguered state budget.
Advocates for local governments, roads, schools and other needs are only months removed from a fight over Virginia’s $77 billion two-year budget, when lawmakers were far more optimistic about a swift turnaround from a national economic downturn.
But recent weak performance in key revenue streams, especially payroll and sales taxes, could be signs the state’s fiscal problems are far more severe than once thought.
In his speech Monday, Kaine told House and Senate funding committees that no area is off the table for cuts. He declined to estimate the size of the shortfall pending a revenue re-forecast this fall, but some legislators say it could top $1 billion through fiscal 2010.
Some agencies already are trying to figure out how to carry out cuts mandated by the legislature earlier this year. The state’s aid to localities, which helps pay for social services, libraries, jails and other items, was slashed by $50 million for each of the next two years.
Dean Lynch, director of intergovernmental affairs for the Virginia Association of Counties, worried that figure would widen in 2010 as a result of the new shortfall. The group is preparing a renewed lobbying effort in Richmond.
“We’re watching right now; we know that we’re going to be in more of a defensive posture in trying to protect state reimbursements to localities in every program,” he said. “We have core services that we have adamantly said need to be funded — those are education, those are human service programs, those are some public safety programs.”
Highway construction money also is likely to take a hit, even after the Commonwealth Transportation Board reduced expenditures in its six-year plan by $1.1 billion in June.
Northern Virginia Transportation Alliance President Robert Chase said it was impossible to speculate which road projects would be on the chopping block, but added that those in early engineering, design and right-of-way acquisition phases probably were most vulnerable.
Most of the less-essential projects already have been cut or delayed as the six-year program shrinks, and “future deletions are most likely to cut bone,” Chase said.
Unlike other expenditures, education has evaded earlier rounds of belt-tightening.
“We’re hoping as they get closer to that point, they find some way to do it again,” said William Johnson, spokesman for the Virginia Education Association.
