The Virginia Budget May Be An Early Casualty of Coronavirus

Virginia’s $135 billion budget passed the General Assembly a few days late and loaded with promises of raises for state workers, more spending on education, health care, transportation and so on.

House Appropriations Committee chairman Luke Torian (D-Prince William) called the budget historic. Senate Finance Committee chair Janet Howell (D-Fairfax) said it “prioritizes the people of Virginia while maintaining structural balance in order to protect Virginia’s AAA bond rating.”

Fine sentiments, sure. And the coronavirus rapidly made them worthless.

Virginia’s budget will have to be changed — perhaps in ways few members of the General Assembly could have imagined even a week ago. State Sen. Steve Newman (R-Bedford) urged his colleagues to delay passing the budget for a few days to give lawmakers an opportunity to get a better handle on the evolving crisis.

Howell also said the Senate would examine and propose options to Gov. Ralph Northam (D) in advance of the April 22 veto session.

But those may not be enough.

On Monday, Senate Minority Leader Thomas K. Norment (R-James City) sent a letter to Northam urging him to call a special session. Among the reasons: The revenue estimates that form the budget’s foundations were produced in 2019 — long before most Virginians had ever heard of a coronavirus.

Those forecasts showed steady increases in state revenue through 2022.

Norment wrote, with his usual understatement, those assumptions “may no longer be operative.”

In one example of the new costs facing state and local governments, Norment said he believed the costs of closing the state’s public schools “will cost $444 million.”

“Those additional, unanticipated expenses,” Norment said, “as well as revenue projections that may now be too robust necessitate a fresh look at our finances.”

The question is how quickly the state’s economy shrinks. Sales tax revenue from panic buying is likely to offer some cushion to state and local balance sheets.

But that revenue — and a host of others, from gas taxes to local meals taxes — are also likely to crater in the face of orders to stay at home, avoid restaurants, bars, gyms and more.

And that’s all before the predictable rise in unemployment among workers in those same industries.

Northam’s Finance Secretary, Aubrey Layne, said the “key to the general fund revenue forecast remains the fourth quarter when individual final payments [for state income taxes] are due on May 1.”

That might still be true, if for no other reason than those tax returns reflect 2019 income — pre-coronavirus.

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