State Budget Woes

By: Erin Tate
By: Erin Tate

Virginia faces its worst fiscal crisis in fifty years. Gov. Mark Warner is trying to lessen his budget blows by freezing, not slashing, services like Medicaid.

Dr. Bob Roberts, Political Analyst and JMU Professor, explains.

"Medicaid is a program that is exploding in costs. It's escalating at 16 to 17 percent a year. So, what they're doing is not necessarily cutting it, but significantly slowing its growth," he says.

Reimbursements to hospitals and nursing homes are on hold. But Warner is promising 60 million more for health care programs. Analysts say that amount like the $65 million increase for public education, falls short of the state's needs.

"When our children look back at our work, will they see gridlock and partisanship, or reform and progress?" asks Gov. Mark Warner.

Communities will feel the sting of $145 million in cutbacks. And Virginians should expect increased fees for services that used to be free. State police, local sheriffs and commonwealth attorneys face a five percent cut but no lay-offs. And Warner hopes to eliminate or merge 12 state agencies in 2003.

"A lot of agencies hit fairly reasonably in 2003 will be hit a lot harder in 2004," points out Roberts.

Warner plans to offset the cuts by dipping into the state's rainy day reserve.

"During the 1990s, the state built up a half a billion dollars in reserve in case of a fiscal exigency. And they're going to spend that down to about 100 million dollars. So, they're really spending that down to about zero," says Roberts.

Christmas sales and car sales could boost the economy next year, but if not, deeper cuts and higher taxes are on the horizon.

Analysts say Warner's amendment proposal is well-crafted and sophisticated. And they don't expect that the state legislature will tweak it much. In fact, they say the alternatives are worse.


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