Virginia’s budget impasse tests local jurisdictions
By Anita Kumar,
RICHMOND — In fast-growing Prince William County, officials may cope with Virginia lawmakers’ failure to pass a state budget during their regular session by abandoning construction of parks, holding employee salaries steady or possibly raising taxes.
Nearly 160 miles south in Campbell, a largely rural county that hugs Lynchburg, the small city the late Jerry Falwell made famous, officials may lay off employees.
Each of Virginia’s 134 localities — affluent and not so affluent — is bracing for the worstafter the General Assembly ended its session this month without approving a two-year state budget because of partisan disputes over spending and power.
With their own deadlines to meet, many local officials are now planning budgets in the dark: They don’t know when or how much funding will come from Richmond, which spends half its general fund on localities.
“Without a budget, you’re guessing,” Campbell Sheriff Steve A. Hutcherson said. “I think it’s crazy they can’t just sit down and come up with a budget. They’re playing politics.”
Legislators will return to Richmond for a special session this week as they attempt to adopt an $85 billion spending plan before July 1, the start of the fiscal year. Failure to do so could result in a partial government shutdown for the first time in Virginia history — not just for the state, but for its 95 counties and 39 cities, too.
Campbell receives more money from the state than it does from local coffers— $60 million, nearly half of its $127 million budget, according to an annual report by the Virginia auditor of public accounts. Prince William gets nearly $500 million from the state, about 35 percent of its $1.4 billion budget.
A dozen negotiators from the House of Delegates and the Senate will try to hash out a compromise starting Wednesday before all 140 lawmakers return for a vote. Legislators must agree on a two-year state spending plan that would help pay for everything from prisons, road maintenance and colleges on the state level to courts, registrars and health care locally.
“I think after a week of rest and being reunited with their families and hearing from constituents, I think they’ll be in a lot better frame of mind to get down to the important work,” Gov. Robert F. McDonnell (R) told reporters after lawmakers failed to agree on a plan.
It’s not the first time lawmakers have had trouble agreeing on a spending plan, but it is the first time that one of the chambers couldn’t muster enough votes to pass its own version.
Senate Democrats have voted down two budgets and threatened to scuttle a third after Republicans failed to give them more power on committees and increase spending in certain areas. November’s elections left the Senate equally divided between the parties, but Republicans took control because Lt. Gov. Bill Bolling (R) has the power to break some tie votes. He cannot, however, vote on the budget.
“By and large, I think the two bodies are closer now than they were in ’04 and ’06,” Senate Minority Leader Richard L. Saslaw (D-Fairfax) said. “I think this thing can be resolved fairly quickly. It won’t happen in two hours or anything like that, but it won’t take two months.”
In the meantime, localities are estimating what the state might give them as they put together their own spending plans using last year’s numbers or McDonnell’s introduced budget, which legislators can change. Some are expecting the worst and have advertised an increased tax rate — just in case.
“You can estimate, but you can’t fine-tune anything,” said Dean Lynch, deputy executive director of the Virginia Association of Counties. “The longer we go, the harder it is.”
The association has urged localities to lobby legislators through letters and recently held a news conference on Capitol Square urging the General Assembly to pass a budget — any budget.
“Just give me a budget,” William Robertson, a member of the Prince George County Board of Supervisors, said at the recent news conference.
Deadlines are looming. School budgets must be adopted by May 1, and county budgets by June 30. But before that can happen, localities must advertise tax rates twice, hold public hearings and inform teachers by April 15 if they will return for the next school year.
Campbell Administrator R. David Laurrell said the county has pushed its schedule back two weeks. Prince William advertised a higher tax rate, which it can lower when it adopts the rate next month. “I was not happy to be doing that,” said Corey A. Stewart (R), chairman of the Board of County Supervisors. who prides himself on being a fiscal conservative.
“We’ve had budget impasses before. I think this is a little more unique,” said Del. Kathy Byron (R-Lynchburg), who represents part of Campbell. “They don’t necessarily know there is going to be a resolution to this.”
The problem is not just the uncertainty — it’s the possibility of budget cuts and policy changes that will cost localities more.
McDonnell wants to withhold more than $200 million from K-12 in inflation adjustments and Standards of Quality, state-mandated minimum objectives for public schools. He proposed returning $25 million of an existing $120 million cut over two years in aid to localities. And he reduced by $65 million a fund to woo non-teacher school employees in Northern Virginia. in the competitive, expensive Northern Virginia market . (Prince William’s share of that cut is $22 million).
The House and Senate are looking to spend more, but the numbers differ.
Local governments also worry about extra costs associated with changes lawmakers expect to make to the Virginia Retirement System that require them to give employees a 5 percent raise to offset having to pay a 5 percent pension contribution.
That is estimated to cost Campbell $500,000 and Prince William $5 million.
“It’s a significant problem,” Stewart said. “It’s very difficult for us to plan our budget.” We’ve built in a lot of flexibility.”
Prince William had started to recover from the recession and was planning to offer a 3 percent merit raise for employees and resuming construction on parks, libraries and road projects, including the widening of Route 1 , which stopped in 2008. Now, Stewart said the county plans to adopt a budget in mid-April using the worst-case scenario.
Campbell is using the governor’s budget as a road map. It reduced K-12 funding by $5 million, and could lay off 25 county employees. from its 2,800-member workforce.
“This is unprecedented,” Laurrell said.
Staff writer Laura Vozzella contributed to this report.
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