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Opinion Why we’re taking a budgetary ‘timeout’ in Virginia

Customers read closing notices posted at a Virginia Alcoholic Beverage Control store in Springfield on April 13.
Customers read closing notices posted at a Virginia Alcoholic Beverage Control store in Springfield on April 13. (Shawn Thew/EPA-EFE/REX/Shutterstock)

Ralph S. Northam is the governor of Virginia. Eileen R. Filler-Corn represents Fairfax in the House of Delegates, where she is speaker of the House of Delegates. Richard L. Saslaw represents Fairfax in the Virginia Senate, where he is majority leader. Luke E. Torian represents Prince William in the House, where he is chairman of the House Appropriations Committee. Janet D. Howell represents Fairfax in the Senate, where she is chair of the Senate Finance and Appropriations Committee. Emmett W. Hanger Jr. represents Augusta in the Senate. Northam, Filler-Corn, Saslaw, Torian and Howell are Democrats. Hanger is a Republican.

The coronavirus has brought challenges that society has not faced in generations. It is upending our lives, our health and our economy, leaving only one practical option: Fix the health crisis first, then fix the economic crisis.

But Virginia’s constitution requires the governor and lawmakers to act now. Virginia must make multiyear financial decisions in the next few weeks, even as the global pandemic makes long-term planning impossible. Today’s new fiscal reality is drastically different from what was certain just a few weeks ago.

That is why Virginia is pursuing a budgetary “timeout.”

It works like this: Pause all new spending, leave it in place but set it aside, then return later in the year to update the budget once the economic picture is clearer and our economy is moving again.

Virginia, as with other states, must budget based on projections of how much money will come in. But it’s impossible for any state to accurately project future revenue now, with so many businesses closed and so many people out of work.

Urging people to stay home — even if it means they’re not working — is the right public health solution. But it is a big hit to a state when people aren’t working. In Virginia, 70 percent of our general fund revenue comes from individual income taxes. An additional 17 percent comes from sales tax payments. But when workers earn less, they spend less and, therefore, pay fewer sales taxes. Every major state revenue stream is taking a hit.

This is a stark turnaround from just a month ago. In Virginia, total general fund revenue had grown 6.2 percent year-to-date, nearly double the official forecast. Based on that, the General Assembly passed a forward-looking, fiscally sound budget that made important new investments, from education to natural resources and more. It also included $10 million to fight the novel coronavirus. That looked like enough at the time, but now it’s clearly not.

Legislators passed that two-year spending plan barely four weeks ago, on March 12 — the same day that a state of emergency was declared.

Since then, the primary financial need has turned to funding the health response, including expanding testing, buying personal protective equipment and helping vulnerable people who can least afford the effects of this virus. It includes protecting health-care workers and supporting workers and businesses through economic uncertainty. All of this will cost the commonwealth extraordinary sums that last month’s budget did not include. The federal Cares Act and other recent legislation will help but won’t be enough to solve ongoing budget concerns.

Virginia’s timeout plan will suspend roughly $3 billion in planned spending. This includes priorities such as early-childhood education, free community college for high-demand fields and $600 million in deposits into long-term cash reserves. The budget line items will remain, and it is our hope to fund as many of these priorities as possible, but the state agrees not to spend it unless the General Assembly takes further action.

In financial terms, the timeout preserves the liquidity needed to fund the health response. In operational terms, it means our government can continue serving people. And in political terms, it means everyone sacrifices.

But it also creates an optimistic path forward. It leaves the governor’s and the General Assembly’s spending plans on hold, rather than simply tearing up the budget that legislators worked so hard on and proudly passed on a bipartisan vote.

When the health crisis has eased, we’ll have a better financial picture. That will be the appropriate time to have the necessary discussions and debates about priorities as we move forward.

All states are dealing with similar pressures. Legislators will return on April 22 for a session to review the governor’s actions on the General Assembly’s bills. Then, the timeout plan will require a special legislative session later in the year, when we will revisit our priorities as initially laid out in the budget passed by the House of Delegates and Senate.

Virginia will get past this virus, our economy will reopen, and people will go back to work. We will start to rebuild. We join to plan for that day in the spirit of cooperation and shared sacrifice that our commonwealth and our country need so urgently right now.

Read more:

Norman Leahy: The Virginia budget may be an early casualty of coronavirus

The Post’s View: Our coronavirus response is America at its best. But it’s just beginning.

Craig Spencer: When the coughing stops and the sense of helplessness begins

The Post’s View: Can we reopen before there’s a cure or a vaccine? It won’t be easy.

Coronavirus: What you need to know

The latest: The CDC has loosened many of its recommendations for battling the coronavirus, a strategic shift that puts more of the onus on individuals, rather than on schools, businesses and other institutions, to limit viral spread.

Variants: BA.5 is the most recent omicron subvariant, and it’s quickly become the dominant strain in the U.S. Here’s what to know about it, and why vaccines may only offer limited protection.

Vaccines: Vaccines: The Centers for Disease Control and Prevention recommends that everyone age 12 and older get an updated coronavirus booster shot designed to target both the original virus and the omicron variant circulating now. You’re eligible for the shot if it has been at least two months since your initial vaccine or your last booster. An initial vaccine series for children under 5, meanwhile, became available this summer. Here’s what to know about how vaccine efficacy could be affected by your prior infections and booster history.

Guidance: CDC guidelines have been confusing — if you get covid, here’s how to tell when you’re no longer contagious. We’ve also created a guide to help you decide when to keep wearing face coverings.

Where do things stand? See the latest coronavirus numbers in the U.S. and across the world. The omicron variant is behind much of the recent spread.

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