The snow flurries that appeared yesterday in parts of the commonwealth were not the only indication that Virginia’s winter may be long, dark and bitter.
According to a report from AP reporter Bob Lewis, General Assembly leaders are beginning to learn some of the grim details that confront Virginia’s budget.
…budget writers got their fullest look Tuesday at a darkening fiscal crisis that will soon force them to cut government priorities once held harmless.
“You are at the juncture where all the low-hanging fruit is gone,” members of the House Appropriations Committee learned from the chief of the committee staff, Robert Vaughn.
Virginia’s Community Colleges have already absorbed two different 5% cuts this year – a reduction of $40 million – despite the fact it is continuing to shatter previous enrollment records.
It is hard, however, to find much of a silver lining in the information being presented to law makers:
In the hard-hit real estate sector, Virginia in October saw a tenfold increase in the number of home foreclosures since 2004. People who held onto their homes have seen their equity wither the past two years. One telling measure from the Washington, D.C., market is that the percentage of people who forfeited deposits they had put down on contract to buy a house increased from 4 percent in 2005 to spike at 66 percent in August, largely a measure of buyers who could not secure financing, according to a George Mason University analysis.
Legislators were told to expect a grim 2009, expect a recovery late that year or early 2010, then a more robust economic expansion in 2011. Other glimmers of hope:
_Fuel prices continue to fall as the nation enters the winter heating season.
_There are signs that the worst of the housing slump may be over. And homes are more affordable now than they have been in three years.
_Military spending continues to buttress Virginia’s economy with an 18 percent increase in the past quarter. Virginia is second only to California in military spending.
We will learn more December 17 when Governor Kaine offers his budget amendments to a joint meeting of the General Assembly money committees.
Posted by Jeff Kraus