According to early projections, the Virginia General Assembly will face a surplus of as high as $1 billion when it convenes for the 2005 legislative session in January. Gov. Mark R. Warner and several legislative leaders are urging restraint on spending, noting the same projections forecast a deficit in the next budget cycle.
Tax increases resulting from last spring's contentious budget session as well as strong economic growth account for the additional revenue, but Virginia's commitments to K-12 education, Medicaid and reducing the car tax virtually ensure a deficit during the 2007-2008 budget cycle. Virginia operates on a two-year budget cycle; during last spring's session, the General Assembly approved the 2005-2006 budget.
Del. Rob Bell, R-Albemarle, said the General Assembly needed to avoid making new spending commitments, something he said was a problem in the spring.
"I think we should be very, very careful before we spend all this money and land ourselves in the same problem we landed in the spring," Bell said.
Warner spokesperson Ellen Qualls said the governor wanted the legislature to focus on one-time expenditures, as opposed to ongoing programs.
"Every time you create an ongoing program or commit to a higher level of funding for anything in state government, you've created a problem that will essentially roll into the next budget and to the next budget and after that," Qualls said.
The General Assembly, however, will face pressure from groups promoting funding for transportation and other items, Politics Prof. Larry J. Sabato said.
"They were not met at all in the last session, so there will be tremendous pressure to spend that money in good part on transportation," Sabato said.
For example, some delegates have proposed dedicating most of the surplus to transportation funding, but Qualls said Warner is not in favor of their plan.
Sabato said the chartered universities proposal, which would reduce state funding for the University, William & Mary and Virginia Tech, might find a receptive audience in a legislature trying to reduce spending or at least control its rise.
"They prefer to look for ways to save money that have the least amount of pain associated with them, and since the schools are volunteering to do this, that would have little pain associated with it," Sabato said.
But Qualls and Bell stressed that the proposal will be examined for more than just its financial aspects.
"Saving money is a good thing, but we need to look at the rest of the picture too," Bell said.
Despite concern over spending and deficit forecasts for 2007 and 2008, Qualls said the projections showed a rough balance in 2009 and 2010, and expressed confidence in the General Assembly's ability to avoid spending increases in the upcoming session.
"In the next session, I think by and large, the majority in both chambers agrees with the fiscal path that we're on," Qualls said.
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