Well, it had to happen sooner or later: State revenues are coming in behind budget. Reports the Associated Press: “With just two months left in the state fiscal year that ends June 30, overall growth came to 3.6 percent compared with the budgeted estimate of 6.5 percent growth.”
Revenues have been trailing projections since the beginning of the fiscal year, but there was no way to know whether the shortfall was just a momentary blip. But with only two months left, the chances of making up the gap is not promising. Fortunately, everyone has seen the shortfall coming, so no one seems too alarmed.
Cuts to nonessential spending wouldn’t harm key services such as education and health care and could balance the state budget in the short term, said Del. M. Kirkland Cox, R-Colonial Heights, a senior budget negotiator. But he said the shortfall could have an effect on planned programs, such as the governor’s campaign promise to create universal pre-kindergarten programs.
With a fat rainy-day fund, and multi-hundred-million-dollar-a-year commitments to one-time capital projects in the current biennial budget, there should plenty of padding for ongoing programs in the next biennial budget. There may not be as much money available for one-shot spending like mental health facilities and Chesapeake Bay clean-up, but core programs should not suffer. Plus, there’s always the chance that the economy, which slowed noticeably in the first quarter of 2007, will regain momentum.