I was talking to a public official a few weeks ago and I mentioned to her how concerned I was about Fairfax County's $540M budget shortfall for FY2009. She told me that Virginia is "not bad" at all in comparison to most states. As I do some research on how "not bad" the situation is, I found Virginia is one of 29 states that has a budget shortfall in FY2009 based on The Center for Budget and Policy Priorities, http://www.cbpp.org/1-15-08sfp.htm, and Virginia (tied with Massachusetts) is in the top 7 -- California tops the list at $22B, New York at $4.9B, Florida at $3.4B, New Jersey $2.5B, Arizona at $1.9B, Illinois $1.8B, Massachusetts and Virginia are tied at $1.2B.
For the states with budget shortfalls, residents as well as the economy are affected severely. What this means is that states must balance their budgets by either cutting expenditures, raising taxes, or tapping on to reserve funds.
How will these shortfalls affect us, the residents of Virginia? Decrease of college funding, state workforce hiring freeze, cuts in transportation funding, education, problems for elderly and disabled, public health programs? Economists I have spoken with told me that the economy will continue its down trend for another 2 years. If states continue with deeper cuts, tightening of more expenditures and tax increases, the effects can actually exacerbate the current status because of decreasing demand. The question to ask is how much reserves does Virginia have and can it be tapped for such situations. Would it ask for assistance or government bail out like California?
