Willful neglect of Virginia’s second-year budgets must not become our new normal

They had one job.

The 15 state legislators responsible for revising the state’s budget for the next year (now just 11 months) were supposed to resolve their few differences over the state’s master spending blueprint and write it into state law by July 1.

Tomorrow’s Aug. 1, and still there’s no agreement, even though there’s a financial cushion of somewhere between $3 billion and $5 billion, depending on whose estimates you accept, waiting to be budgeted.

There is plenty of partisan posturing and blamestorming between the Republicans, who rule the House of Delegates and the governor’s office, and the Democrats, who hold the Senate, but there’s no discernible initiative on either side to finish the job soon.

They’re having too much fun using it as a political football heading into fall’s pivotal off-off-year state legislative elections. Why amend the budget to appropriate money for various needs or to cut taxes when you can spend the next few months damning the other side for a shared failure?

In one regard, we’re lucky it’s not a crisis the way it almost was last year. In 2022, they came within days of not having a new-from-scratch budget in place by the midnight witching hour when June becomes July, the old budget expires and a fresh fiscal year begins.

This is a good spot for some background for people who have real lives and aren’t intimate with the byzantine world of Virginia governmental finance.

The commonwealth budgets in two-year increments. These biennial budgets take effect every even-numbered year. It’s a much bigger deal to miss the June 30 deadline in those years when the underlying budget ends and the state can’t pay its bills.

This is an odd-numbered year, so the second year of the biennial budget is still in force and the state still has operating money. But things change over the course of a year and budgets need to change with them.

Some needs become acute while others diminish. Markets and prices rise and fall. Consider that this time last year, a gallon of gasoline was pushing $5, but you could still secure a 30-year mortgage at an annual interest rate of about 5% compared to about 7% now. In 2021, mortgages were under 3%.

Employment rates rise and fall, too, guiding the ebbs and flows of the state’s general revenue collections derived largely from taxes withheld from paychecks. Virginia has rebounded well from disastrously high levels of pandemic-era unemployment, and the state government finds itself flush with cash: Gov. Glenn Youngkin says it’s about $5 billion; Senate Democrats contend it’s likely lower, maybe $3 billion.

Budgeting when revenues are billions of dollars short of needs is hard work. Deciding how to divvy up a windfall this large isn’t. There’s no shortage of needful uses. Youngkin and the GOP want to cut taxes. Democrats want it spent on public schools. Either option beats letting it sit idle.

Perhaps the most conspicuous and demonstrable need is the serious shortage of public school teachers as the commonwealth struggles to remediate alarming student learning losses, both consequences of the pandemic.

A provision already in the budget provided school districts with enough money to boost teacher pay by 5%. Stranded within budget revisions that both parties are holding hostage is a bipartisan proposal to increase the teachers’ raise to 7%. Had budget conferees acted with deliberate speed, it would have lent local school administrators a helpful edge in competing for in-demand teachers back in May or June, before their districts had to lock in their 2023-2024 budgets and make employment offers based on them. Pupils in some districts have already returned to class.

“Some school boards did not go with the 7% [raise] because they weren’t confident that [it] would be in the final budget,” said Scott Braband, executive director of the Virginia Association of School Superintendents.

Just how much Virginia needs the added funding was made clear earlier this month in a study by the General Assembly’s analytical arm, the Joint Legislative Audit and Review Commission, which found Virginia significantly underfunds its schools. The report said school divisions in the commonwealth receive 14% less state aid than the 50-state average. It also prescribed programs needed to bring Virginia’s schools to parity at an estimated cost of about $3.5 billion over several years.

Study finds Virginia underfunds K-12 schools, recommends spending billions more

Yet work toward a revised budget still languishes.

“Frankly, this continues to be part of the climate in which teachers are making decisions: ‘Is this (teaching) something I want to get into or something I want to stay in?’” Braband said in an interview last week. “It affects teacher recruitment and retention.”

Evidently, valid concerns about something as fundamental as the scholastic wellbeing of Virginia’s next generation — a necessity buttressed by data, research and the everyday experiences of students and their parents — don’t register on Capitol Square. Primary elections pushed the responsibility of finalizing a budget off the to-do list through June.

Now, if it’s no trouble, might we bother you for a budget?

Now, retail politics ahead of November’s general election seems to be taking precedence over the people’s business, possibly backing the process into December.

The damaging legacy from this is that it further distances Virginia from a time not so long ago when budgeting was taken more seriously, when there was a shared sense of discipline toward completing this central policy task and a palpable sense of shame for failing. The last time there were no odd-year budget amendments was 2001 when Senate Democrats and Republicans together balked at Republican Gov. Jim Gilmore’s demand to advance his car-tax phaseout in a recession with state revenues declining.

What’s to keep future budget conferees from doing nothing? They could shrug it off, remembering that when it happened in 2023, no one took to the streets and hell didn’t freeze when they let billions gather dust while they played politics.

That sort of mindset would be extremely disruptive, particularly for public institutions that need predictable, dependable streams of state resources to provide taxpayers the best public services possible.

“That’s it,” Braband said. “This kind of budget process cannot become the new normal. Virginia’s better than that. Virginia educators deserve better than that and Virginians deserve better than that.”