Though Virginia's economy has already suffered during the recent recession, at least one expert suspects the worst is yet to come.
In the most recent issue of the Virginia News Letter, published by the University's Weldon Cooper Center for Public Service, James Regimbal Jr. wrote that Virginia's budget is a "train wreck waiting to happen." Regimbal, who heads the Richmond consulting firm Fiscal Activities, sharply criticized the commonwealth's reliance on its reserve funds, known as "rainy day funds," to protect its budget from major cuts.
"The reserves are gone," Regimbal said, noting that continued state-level funding cuts can only continue for so long before officials will be forced to face a much more dire situation.
Gov. Tim Kaine spokesperson Gordon Hickey, however, disagreed with Regimbal's theory.
"The rainy day budget is for these types of situations," he said.
This dependence on the state's rainy day funds, though, could worsen Virginia's economic situation, Regimbal said, noting that the commonwealth needs to sort out its priorities. Virginia's government needs to "determine whether or not Virginia's tax structure and rates are adequate to sustain a high quality public education, public safety, health and welfare, and transportation system that Virginians have come to expect," he said.
If state officials fail to do so, the implications for Virginia's budget are grave, Regimbal said.
"Virginia's government is going to continue to get smaller, and even core programs are going to be reduced further," he said, adding that state colleges and universities will most likely face further budget cuts. This year and last year especially, University and other higher education officials - well aware of the state legislature's history of decreasing support - have warned of similar reductions in funding and have taken proactive steps to address foreseeable problems, slashing some programs and enacting hiring freezes. Moreover, leaders like President John T. Casteen, III. have repeatedly noted that the University is actively seeking to become an almost entirely privately funded institution to counteract the dearth of government-backed monies.
Considering these factors, Isaac Wood, assistant communications director at the University Center for Politics and a former Cavalier Daily Opinion columnist, mostly agreed with Regimbal's assessment.
"Politicians and political observers agree that Virginia has been in a budgetary mess," he said.
Wood added, though, that he believes the commonwealth is most likely in a better position financially than some states that have been hit even harder by the recession, like California.
Nevertheless, Wood said, legislators need to take action soon to address the state's financial future.
"The equation is soberingly simple," he said, noting that the commonwealth must either cut its spending or raise taxes to avoid even greater shortfalls.
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