So you’re the governor of Virginia, and you’re trying to make the tough calls on the state budget with a Commonwealth that like the rest of the country and the world that is in the midst of an economic downturn. Your first order of business would seem to be to try to get some sense from those in the know as to where things might be headed soon so that you could then get a handle on what you might need to do to keep the state budget in balance. You know, since you have to do that, because unlike the folks up I-95 inside the Beltway, you actually have to keep your budget in balance.
Give Tim Kaine credit. He does what you’d hope that he’d do in that respect.
“The way we do revenue projections is I bring economists and industry leaders and legislators from both parties together and we do projections. And so all the projections we’ve done have been consensus projections. But the last projection meeting we had, which was in mid-September, was the first one we had where everybody didn’t agree. Every one before was, Yeah, here’s our consensus, that was easy. The one in September, though, everybody didn’t agree. Some were pessimistic, and some were real pessimistic. That’s just a reflection of the fact that there’s real uncertainty,” Kaine told me on Thursday during his daylong tour of Staunton and Augusta County.
Ouch, babe. “Some were pessimistic, and some were real pessimistic,” huh? Which is akin to saying, the bad news is that you have cancer, and it’s terminal, but the really bad news is that there’s a Mack truck about to slam into you head-on and render the rest of it meaningless.
OK, so it’s not really that bad. We have a saying in the Valley that we’re generally immune to the ebbs and flows of the national macroeconomy because of the presence of the stable agricultural sector that tends to do well even in times of particular economic distress because even in times of particular economic distress people need to eat. To some degree, the state as a whole benefits from that insulation as well. The state also does well because of the influence of the federal government as an economic engine in Northern Virginia and the United States military as an economic engine in Hampton Roads, both of which, like people needing to eat even when times are tough, are going to do their thing no matter how bad it gets out there for everybody else.
Kaine even said as much in our conversation yesterday. He talked about how he was scheduled to be on a conference call with governors from across the country Thursday afternoon, and one thing that he hears from the governors set is how bad they seem to have things relative to the situation in Virginia. “From talking to them, I would not trade places with anyone. This is the state to be in. We’re so well-positioned to get through this challenge and be very, very strong going forward because of our diverse economy, our strong educational system and especially the great people we have working for us,” Kaine said.
Which isn’t to say that Kaine and his brain trust don’t have some tough choices to make in the coming weeks relative to the slowdown that maybe isn’t hitting us as hard as it is hitting others, but it is still providing quite the mighty wallop in the meantime.
“We just have to be conservative on our assumptions and look at the data,” said Kaine, who will update his budget assumptions one more time before the 2009 Virginia General Assembly session, in a speech to state legislators next month. “Before I speak to the legislature, I will have the benefit, for example, of the Thanksgiving weekend, which is a big shopping weekend, and I’ll know how Christmas sales are likely to look based on what we see with that,” Kaine said.
“What I say to everybody is, Look, the only reason that government revenues are slow is because we’re in a recession, and businesses and families are having to make tough decisions, and we have to make them, too,” Kaine said.
– Story by Chris Graham
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