Story by Chris Graham
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The bad news: The state is facing down another massive budget shortfall.
The good news: According to Gov. Bob McDonnell, the state can expect to see more revenues in the coming year with the improving economy.
“I am pleased to report that the updated revenue numbers from the Department of Taxation project a slight increase in incoming revenue for the year ahead. I have made a conservative estimate of increased revenue based on the new information,” McDonnell said on Wednesday at a press conference detailing the latest revenue projections.
McDonnell said he will recommend to the General Assembly that the projected new reveunes be put toward K-12 public education, employee compensation and other core government services. He also called for a restoration of some of the proposed cuts to public safety and no further cuts to higher education. “Tough times call for setting priorities. Public safety and higher education have been cut significantly in recent years and cannot sustain further reductions,” the governor said.
So maybe the economy really is getting back on track. An executive summary of the revenue reforecast from McDonnell’s office cites among its reasons for pushing the forecast in a positive direction movement in the home-sale market that is outperforming expectations.
Another view – perhaps the McDonnell team is falling into the same trap that his predecessor Tim Kaine did in offering a series of revenue reforecasts that underestimated the impact of declining state revenues on state government, forcing painful mid-year corrections in each of the past two budget years.
Additional resources:
– Download the executive summary of the mid-session revenue reforecast.
– Download Gov. McDonnell’s letter to General Assembly leaders on proposed budget savings.
– Download the governor’s recommendations on spending adjustments related to the revenue reforecast.
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