PERSPECTIVE: State’s next governor faces money challenges

» Candidates have big ideas, but how will they pay for them?

Two headlines from the spring describe the challenges that will await the governor Virginia will elect in November:

“Stimulus Package Being Felt in Va. / Study Says $9 Billion Has Closed 37 Percent of State’s Budget Gap.”

“Education Money Reaches Va. / The Stimulus Funds Will Be Used to Help Make Up for Budget Cuts and to Save Jobs.”

The process for balancing Virginia’s budget has caused real pain. As the headlines indicate, an absence of federal stimulus money would have made the situation far more difficult. This is a statement of fact, not an endorsement of the stimulus package.

The stimulus funds will not last forever. Indeed, the program likely will expire before the economy returns to the status quo ante. Although there are signs of recovery, as Jeffrey Lacker of the Richmond Fed concludes, jobs typically trail other indicators. Many experts expect the unemployment rate to rise another point or more, even as various markets register improvement. Stagnant payrolls mean stagnant state revenue from income taxes in particular.

It needs to be stressed again that stimulus dollars have buttressed existing programs — items the commonwealth otherwise would have had to cut. Maybe it should have pruned or eliminated many of those items — and maybe it still should — but few politicians make that argument. It is fatuous to imply that the needed savings can come from controlling waste, fraud, and abuse.

Both gubernatorial candidates — Republican Bob McDonnell and Democrat Creigh Deeds — outline ambitious plans regarding education, transportation, and other lovely things. If there is not enough state money to pay for existing services, then how can Virginia pay for the new? Will future budgets not only in Virginia but in other states depend on permanent federal stimulus? When will the reckoning arrive? As the long-suffering fans of the Pittsburgh Pirates say every opening day, “Wait until next year!”