February’s record-breaking snowstorms worsened already sliding tax collections in Virginia, the state’s finance chief told lawmakers in another round of discouraging fiscal news.
And January unemployment data released Wednesday by the Virginia Employment Commission further illustrate the plodding pace of economic recovery. The number of idled workers grew to 315,200, or 6.9 percent, compared with 5.7 percent in January 2009. The unemployment rate is still well below the national average.
Both reports are bad signs for a legislature struggling with a more than $4 billion shortfall in its two-year budget. Lawmakers in the House and Senate are making scant progress reaching a compromise on bringing state government in line with the diminished tax revenue.
Virginia will need a pickup in collections over the next four months to meet its already negative forecasts, according to a letter from Finance Secretary Richard Brown to the legislature’s money committee chairmen.
Year-to-date revenue — the amount of cash coming into the state’s general fund since the beginning of the fiscal year in July — is down 4.8 percent over the same period last year, a slight downgrade from a month before.
Brown suggests that the recent blizzards, which hobbled the Washington area’s transportation network and economy, bore much of the blame for February’s poor performance.
“This result is not entirely unexpected given the unusual inclement weather in February,” he wrote.
If revenues keep falling, the House and Senate will need to root out new cuts beyond the deep reductions already proposed for schools, health care and public safety. The Senate is relying on fees and more optimistic fiscal projects to blunt cuts to K-12 education. The House is proposing to cut $620 million from schools, while the Senate has put forth cuts of only $133 million. Both chambers are proposing to save hundreds of millions by underfunding the state’s retirement system.
