An End to the Chronic Budgetary Surplus?

Well, it had to happen sooner or later: State revenues are coming in behind budget. Reports the Associated Press: “With just two months left in the state fiscal year that ends June 30, overall growth came to 3.6 percent compared with the budgeted estimate of 6.5 percent growth.”

Revenues have been trailing projections since the beginning of the fiscal year, but there was no way to know whether the shortfall was just a momentary blip. But with only two months left, the chances of making up the gap is not promising. Fortunately, everyone has seen the shortfall coming, so no one seems too alarmed.

Cuts to nonessential spending wouldn’t harm key services such as education and health care and could balance the state budget in the short term, said Del. M. Kirkland Cox, R-Colonial Heights, a senior budget negotiator. But he said the shortfall could have an effect on planned programs, such as the governor’s campaign promise to create universal pre-kindergarten programs.

With a fat rainy-day fund, and multi-hundred-million-dollar-a-year commitments to one-time capital projects in the current biennial budget, there should plenty of padding for ongoing programs in the next biennial budget. There may not be as much money available for one-shot spending like mental health facilities and Chesapeake Bay clean-up, but core programs should not suffer. Plus, there’s always the chance that the economy, which slowed noticeably in the first quarter of 2007, will regain momentum.

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4 responses to “An End to the Chronic Budgetary Surplus?”

  1. James Atticus Bowden Avatar
    James Atticus Bowden

    3.6% is very healthy growth for an economy – or a government budget. 6.5% is ridiculous.

    If there is a shortfall from 6.5% there won’t be a crisis of any sort, but the MSM and Liberal-Dems-RINOs will say there is.

  2. Larry Gross Avatar
    Larry Gross

    I always thought Virginia tended to be conservative in it’s economic forecasts.

    I agree with JB … 6.5% is pretty ambitious.. especially so for Virgnia.

    Does anyone know … what programs will become the “bleeding edge” if there is a shortfall?

    Transportation .. right?

    hmmm… looks like we’re back to six year plans with “sliding” construction dates – (to the right on the date chart).

    But perhaps this is the way it should be philosophically… budget triage… delay/defer capital projects before we cut program operations.

    THAT is where I’d like to see our GA guys get on the same page – agree on a General budget policy which.. in theory – should lead to a less chaotic process.

    This is where.. in my humble opinion – that Convervatives could make major contributions now that we’re going to see major changes with retirements…..


  3. Ray Hyde Avatar
    Ray Hyde

    The Chesapeake Bay program isn’t going to be a one shat deal. This is the first salvo in a long line of creeping requirements.

    Count on it.

  4. Ray Hyde Avatar
    Ray Hyde

    Oops. Sorry about that.

    That was supposed to be “one shot deal”.

    Freudian slip, maybe?

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