SUDDENLY VIRGINIA is looking flush. Tax increases approved this year will add about $750 million to the annual state budget of about $28 billion, and a booming Northern Virginia economy, spurred by federal homeland security spending, could yield an additional $800 million to $900 million above earlier projections, according to state officials. But before too many election-bound state delegates get giddy contemplating spending in Richmond, they should be aware that state coffers won't be bursting for long. Gov. Mark R. Warner (D) and Republican leaders in both houses are warning against any shopping spree that could, in the governor's words, "drive us back into the fiscal ditch" in the 2006-08 budget that the governor must propose before leaving office a year from January.
Preliminary projections indicate that Virginia could face budget shortfalls of $252 million in 2007 and $31 million the following budget year. The analysis concludes that the additional money coming in now is likely to be consumed by spending approved during the 2004 legislative session and by growth in entitlement programs. For starters, Mr. Warner has said that his final budget will require funds to operate two new prisons and about $400 million to continue car-tax breaks.
Still, with all 100 House seats up for election in 2005, more than a few lawmakers are salivating at the prospect of bagging goodies for their districts. The pressures don't stop at the legislature, either; state agencies already have compiled internal requests for $1.5 billion in additional spending for fiscal 2006. The current two-year budget is about $57.7 billion. As reported Sunday by The Post's Michael D. Shear, the governor also has received letters from groups representing police, teachers, doctors and others, seeking about $500 million more. Major transportation improvements -- given short shrift in Richmond this year -- must not be shoved aside again.
"The problem," says state Finance Secretary John M. Bennett, "is that expectations for what might be available in the next session are in the stratosphere." At least at this point, House Speaker William J. Howell (R-Stafford) and House Appropriations Committee Chairman Vincent F. Callahan Jr. (R-Fairfax) agree on the importance of restraint. But how long will it be before these House leaders and their counterparts in the state Senate -- whose views on Virginia's needs and financing have been poles apart -- march off in different directions? And how will Mr. Warner balance all this along with the election-year rhetoric of the two candidates who will be jousting to succeed him? However it plays out, the heady days of "surplus" are short-lived.