The 2010 General Assembly adjourned Sunday having passed a two-year, $82 billion austerity budget. It cuts millions from education, health care and public safety while not raising taxes. (Tax collections have fallen for two consecutive years for the first time since the Depression.) The $4.2 billion shortfall is further offset by some new fees and a large dip into the public-employee pension. fund. Under Tim Kaine and now Bob McDonnell, more than $11 billion has been cut from Virginia budgets since the early days of the economic downturn in April 2007.

In resisting higher taxes, however, the Assembly will force layoffs at the state and local level—the Virginia Education Association is projecting job losses exceeding 20,000—and require health-care providers to make do with even less in state payments for providing medical services to the poor. State funding for schools will drop $646 million over the next two years--this in addition to $1 billion in reductions under the Kaine administration. This will put increased pressure on localities to make hard decisions at a time when their property tax revenues have been severely impacted by the economy.

The budget diverts more than $620 million from the Virginia Retirement System--approximately one-quarter of the revenues freed up by delegates and senators.. Future employees will be asked to retire later and contribute more to their pensions. State employees will take a furlough day this year.

The state will also cut more than $1 billion from health programs. Even with the prospect of additional dollars to the state from the federal government for Medicaid, doctors, nursing homes and others will be compensated only 64 cents on the dollar in the year ahead and 68 cents in the succeeding year. Currently, health-care providers receive 72 cents.

Only 250 more mentally disabled adults will be covered for community-based services, in a state where the waiting list for such services numbers 6,000 and is growing. ,

A prison will close, judges who die or retire won't be replaced and funding for local sheriff's offices will drop 6 percent.

The budget would slash state funding for the arts by 15 percent—a comparatively light hit given that the House, at one point, was intent on eliminating funding for the Virginia Commission for the Arts. Another House target, public broadcasting, would see its appropriation cut 15 percent. The Virginia Foundation for the Humanities is grateful the cuts were not deeper: "The proposal in the Virginia House of Delegates to eliminate all state funding for VFH has been averted. The Senate proposal was adopted in conference to fund VFH at $1.14 million for 2011 and 2012." (A cut of $290,000--they will try to make up at least in part through increased donations from the public).

McDonnell Priorities Sustained

While slashing spending elsewhere, the General Assembly agreed to give the governor more money to lure companies to Virginia and to spend state dollars to buoy the tourism, wine and filmmaking industries, part of an economic push McDonnell outlined during a campaign in which he pledged that creating jobs would be his singular focus as governor.

In addition to working on the budget, the Senate joined the House in approving bills to allow colleges to partner with local school districts to create laboratory schools, expand the use of online virtual schools and empower the state Board of Education to provide advice to those seeking local approval for new charter schools. The package was a McDonnell priority and was passed over vigorous objections from African American lawmakers, who said that this will steal money from existing public education.

(Dave Sagarin, March 15, 2010)