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December 16, 2013

Hold the Champagne

If you read just the governor’s speech about his budget proposal then you might believe that state revenues are bouncing back, and we are making much-needed investments in critical state priorities like mental health, homelessness, and higher education.

You’d be only half right. The governor is proposing new investments, but he also proposed a series of cuts in his budget.

Wait a minute … cuts?

Yes, that’s right. The introduced budget contains cuts to hospitals and schools. By eliminating funding for the rising costs of “nonpersonal services” – a fancy term for things like textbooks and utilities in Virginia schools – the governor saves over $76 million at the expense of our students. And he gets tens of millions in savings from continuing cuts to the state’s two teaching hospitals and reducing Medicaid payments for hospitals throughout the state.

So if revenues are coming back, why is the governor suggesting cuts at all? Because revenues aren’t coming back strongly enough.

Sure, we’ve finally surpassed our pre-recession revenue levels in raw dollar terms, but we’re still not bringing in enough resources to meet the rising costs of providing services to a growing population. Inflation has increased over 11 percent since 2007, and Virginia’s population has increased by nearly 7 percent over that same time. Taking all that into consideration means we’d need an extra $4.6 billion over the next two years to actually hit real pre-recession revenue levels.


The outgoing budget does make a number of critical investments to build up the commonwealth. But the ongoing cuts just keep chipping away at our foundation.

–Sara Okos, Policy Director

The Commonwealth Institute

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