Now comes the news that Virginia is facing a $1 billion budget shortfall in the two-year budget that commenced a month and a half ago.
Oops. How did that happen?
Let’s dial back the time machine to Jan. 31, when the Washington Post reported, “House Republican leaders warned Thursday that there may be a shortfall of as much as $1 billion in Gov. Timothy M. Kaine’s 2009-10 budget, and they demanded that he quickly revise revenue projections.”
Well, with mounting evidence of a slowing economy, Kaine did ratchet back his revenue growth forecasts, and Republicans signed on to the revised budget after pushing for a reserve fund and trimming some of the governor’s spending initiatives. But it looks like they didn’t crank down spending enough. Here we are, not two months into the fiscal ’09 budget, and we’re already in a big, steaming mess of trouble.
Along these lines, while writing a short story for R’Biz recently, I ran across an interesting statistic. The good news (for we Richmonders) was that, according to the latest Bureau of Labor Statistics data, the Richmond regional economy had experienced a net gain of 3,900 jobs over the previous 12 months. The bad news was, they were all government jobs, split fairly evenly between state and local government. That’s really bad news for the rest of the state, which is paying for those state government jobs through taxes.
Could that data be correct? I wondered. After all the angst and pain over budget cuts this spring, was the state government in Richmond still padding payroll? To be sure, I checked the state department of human resource management website, and what did I find?
Between January and June 2008, the state increased the number of non-university job rolls by 662 jobs. That doesn’t match up with the BLS numbers exactly, but it is consistent with the fact that government jobs are growing.
However, the really big jump in jobs occurred among public university employees: up more than 5,000! That’s 15 percent. That makes public higher education, not government, the real growth industry in Virginia. Of course, it’s easy to grow if you can jack up charges and fees with impunity. (See “Tuitions Gone Wild.”) Is there any way to persuade universities to restructure, re-engineer processes or otherwise find ways to boost productivity and drive down costs? Can Gov. Kaine and the General Assembly ever get a handle on increasing payroll and costs until they tame higher ed?
The governor will provide more authoritative information than the patch-work data I can glean from the Internet. We should hear more Monday on how bad the situation is and what can be done about it.
(By the way folks, I’m leaving tomorrow on another long weekend jaunt. Off to Cincinnati. I won’t be blogging again until Tuesday.)
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