Virginia Gov. Bob McDonnell on Thursday announced a new $30 million fund to offset the effects of looming federal spending cuts. But critics quickly assailed the new fund, saying it won’t go very far given the massive federal cuts in store for Virginia.
Moreover, local officials want the governor to give back more of the money cut from local budgets two years ago to help cover a state budget deficit.
“I think the dollar amount indicated [for the fund] would be a drop in the bucket compared to what the dramatic across-the-board cuts of direct federal funding services would mean for Virginia,” said Michael Cassidy, president of the nonpartisan Commonwealth Institute for Fiscal Analysis.
The federal government is due to cut trillions in spending, but how and where it chooses to cut — and the resulting impact on Virginia — are still anybody’s guess, experts said.
But a spokesman for the governor says the $30 million in the new fund is just a “down payment,” and that part of the fund’s purpose is to signal to credit ratings agencies that the state is being fiscally responsible by preparing for the worst. Many worry federal cuts to defense spending could adversely impact Virginians in particular, with so many state residents employed by defense contractors or agencies.
Meanwhile, local leaders wish the governor had set aside at least some of his $545 million surplus for local programs.
“We have been essentially subsidizing the state,” Arlington County Board Member Walter Tejada said, referring to state cuts to localities put in place two years ago. “As there’s some recovery, local revenues are not bouncing back as quickly. It’s only fair that that money be returned to the localities.”
Northern Virginia officials wrote a letter to the governor last week asking him to return funding for health and public safety services, saying they had paid about $30 million in “subsidies” to the state by having to pay for Virginia’s unfunded mandates over the last few years.
