If you could declare the recession over today, it still wouldn't mean a return to rosy times for state and local governments.
State Sen. Edd Houck, D-Spotsylvania, attended meetings of the Spotsylvania Board of Supervisors and the Fredericksburg City Council last night to deliver a sobering message on the budget crisis the state faces, and the difficult decisions that state cuts are likely to force localities to make in the coming years.
"You cannot find any time in the past 50 years that our general fund revenues have suffered more and fallen more drastically than what we are dealing with now," Houck said at the Fredericksburg meeting.
The state's biennial budget has already been cut by $7 billion, he said, and to finish out the current fiscal year, Houck said it is likely the state could have to make $200 million to $300 million more in cuts to make up for falling revenues.
Looking forward to the next two-year budget period, for which Gov. Tim Kaine will announce his plan next month, Houck said the state could be looking at another $3 billion in cuts.
That will be hard to do without cutting education funding again, and Houck said that at this point his goal is "to control permanent damage to our core services."
Public conversations between state and local elected officials often take place at annual dinners or breakfasts, where officials rarely do anything more than smile at each other and avoid any really contentious issues.
But Houck told City Council members last night that he felt the need to attend their public meetings to "sound the alarm" about the difficult times ahead.
The two biggest sources of state tax money are taxes on sales and personal income. As jobs and paychecks have been slashed, both of those sources have taken a nose dive, and since the small signs of recovery some economists are seeing don't include any good news on the jobs front, they're not likely to bounce back any time soon.
"There will be a lag between the economy turning and people being re-employed, hours being extended," Houck said. "There will be a lag before we collect the extra income tax from the recovery."
Houck then acknowledged that most state budget cuts pass shortfalls down to the local level. He suggested that the local officials offer some guidance on "where cuts would cause the least amount of damage."
Vice Mayor Kerry Devine urged state and federal leaders to hold back on making any more mandates on the services local governments provide, since most of those mandates don't come with money attached.
Mayor Tom Tomzak didn't have any specific advice, but said, "Part of the problem we have on this level is we don't have any place to pass it down to. This level of government has the least ability to raise resources."
Council members then turned to some of their own budget business.
They took the first of two votes required to raise the personal property tax from $2.99 to $3.40 per $100 of value.
The tax increase won't bring in any new revenue, but it's meant to keep the city from losing an estimated $866,000 because of declining car values.
Emily Battle: 540/374-5413
Email: ebattle@freelancestar.com