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Opinions differ on state finances
Date published: 6/3/2007
RICHMOND--Virginia is on a course for a small budget shortfall, and--not surprisingly--the leaders of the House and Senate disagree over how to cover the loss should it happen.
Officials in Gov. Tim Kaine's administration said last week that the state has collected less in non-withholding taxes than it had expected, suggesting that there may be a shortfall of $300 million. They won't know for sure until later in the summer.
House Speaker Bill Howell, R-Stafford, says that if that happens, the best place to make up the money is in capital projects--one-time building expenses that could be postponed if the state is short on cash.
But Sen. John Chichester, R-Northumberland, who represents the Fredericksburg and Northern Neck areas, disagrees, saying that amounts to borrowing money to pay for a debt.
"You'd be borrowing money to take care of the shortfall, which would be precisely what prudent fiscal management would say don't do," Chichester said.
He added that during this past session, lawmakers--over his objections--allocated half of what was then a budget surplus to transportation projects. Kaine had proposed putting $161 million into transportation, and the legislature added another $63 million. That's what Chichester would cut if he had to make up the money.
"If you add them together, you get around $227 million. That would be the first place I would go to to make up the shortfall. Take it back out of transportation. It hasn't been spent yet," Chichester said. "You put it in transportation, and that's where you should go get it, in my view."
Howell--who during the session advocated putting even more surplus money into transportation--has no intention of taking it back out again.
"Transportation is a core service," he said. Asked if the money should come from transportation, Howell said: "It better not. There are going to be a lot of angry people if it does."
Both men agree that in a $75 billion two-year budget, $300 million is not that much.
"It's clear that if you're looking at $300 million less than what you'd anticipated, it's not going to affect core services," Howell said. "It's a little premature to be hitting the panic button."
He said this week that in the event of a budget shortfall, he feels citizens wouldn't really notice the small cuts in state spending that might follow.
But there are worries that this could be just the beginning of a more serious budget problem, if collections don't keep pace with expectations.
"There are some trends that are not very comforting," Chichester said. He thinks the revenue numbers for May, which may be available later this week, will give him a better idea of whether this $300 million is a trend or a "hiccup."
"The May numbers are going to tell a significant tale," said Chichester, the chairman of the Senate Finance Committee, who is retiring from office.Chelyen Davis: 804/782-9362