Virginia Gov. Charles S. Robb, in his final revenue forecast before leaving office next month, told legislative leaders today that they will have to make tough choices between equally important programs as revenue projections decline for the state by 1988.
In a brief appearance before the General Assembly's "money committees," Robb said that "notwithstanding more conservative revenue estimates, the economic health of the commonwealth will allow us to meet our commitments."
Robb told the legislators they once again will "be asked to make hard decisions . . . , forced to choose between a number of wants and needs -- each as worthy as the next."
Even so, the legislature is likely to have about $1.278 billion more to allocate for the upcoming two-year budget cycle than the $15.9 billion it had for the current biennium, according to today's forecast.
Robb, whose term expires Jan. 11, will spell out specific spending proposals in his final budget message to the full legislature when it convenes early next month. But today, with Gov.-elect Gerald L. Baliles looking on, Robb told members of the Senate Finance and House Finance and Appropriations committees that the latest economic forecasts indicate the state will be able to:
*Fund its share of the Standards of Quality Education program, including money for an increase in teacher salaries. The cost of funding the standards has been the subject of recent debate, but Robb said "whatever the precise numbers turn out to be," he will propose enough funding to "continue the significant progress we have made in education."
*Improve faculty salaries and provide state-of-the-art equipment at state colleges and universities.
*Give salary increases to all state employes "consistent with our commitment to reward our employes' performance . . . and our statutory obligation to remain competitive with private sector employers.
*Upgrade state-operated ports, clean up the Chesapeake Bay and reduce the backlog for wastewater treatment facilities.
Sen. Edward E. Willey (D-Richmond), chairman of the Senate Finance Committee, said the forecast was "about what I expected." He said there is "never enough to satisfy everyone, but usually enough to get along with."
Willey added, however, that "there is going to be a need for money for highways" and that he will offer three proposals, including an increase in the gasoline tax, "and give them their choice" of how to finance road construction and repair.
Robb said that he has received "a variety of economic predictions" in recent weeks from the Board of Economists, the Board of Revenue Estimates and his Economic Advisory Council, ranging from optimism about the next few years to predictions of slow or no growth in various parts of the economy.
The board was unanimous, however, Robb said, "in its view that Virginia would continue to outperform the nation on most economic fronts."
Del. Raymond R. (Andy) Guest (R-Warren), the new House minority leader, said he thought Robb's forecast was "a bit optimistic." Guest, who holds a degree in economics from Yale, said his advisers say the first half of 1986 will be flat.
While the forecast wasn't as bright as two years ago, Robb spokesman George Stoddart warned against reading too much into it, especially any suggestion that a tax increase might be down the road.
"These projections change all the time," Stoddart said. "It's all a lot of speculation."
Baliles' press aide, Chris Bridge, said the projected $10 million decrease in revenues is "three years down the road. It's premature to say what impact that might have on what could be a $20 billion budget."
Bridge added that Baliles is "very much involved" in helping Robb prepare the new budget.
Specifically, Robb said the forecast is that the general fund will grow 8.2 percent in fiscal '86; 6.4 percent in fiscal '87 and 7.6 percent in fiscal '88.
Compared to last year's projections, in dollars, he said, that means $38.4 million in revenue in '86; $32.1 million more in '87, but a decrease of $10 million in '88.
Robb said much of the $60.5 million net increase in those three years will come from higher sales tax revenues, and most of that -- $42.2 million -- will be returned to localities to help pay for education and other essential services.
The governor said the revised forecast takes into account several factors that could not be anticipated earlier.
One of them is a downward projection in the sales tax based on the likelihood that Congress will approve a bill to exempt food stamp purchases from sales tax, an action that will cost Virginia $9.5 million through 1988. That change, now before a House-Senate conference committee, would cost local governments in the state $3.2 million in revenues in the same period, Robb said.