Fiscal Cliff Lite

Fiscal Cliff Lite

For weeks we have been hearing the steady chatter about the fiscal crisis our country confronts as we face going over a fiscal cliff if our members of Congress and the president fail to come to some negotiated agreement on raising the debt ceiling. In the previous presidential term the debt ceiling was raised twice without fanfare as part of the accounting system our nation uses. Current circumstances, with a Democratic president and a Republican controlled House of Representatives, are just too much of an opportunity for political mischief to extract concessions from the administration and/or to make sparring points on a variety of issues—some are unrelated but meant to embarrass the administration. As I am writing this column there are indications that an agreement might be nearing. Once again, with a divided government we have been freed from the horrors of a plunge over the fiscal cliff. My hope in all this is that our most vulnerable citizens will be spared in the final compromise for in the protracted discussions their benefits were the ones most often on the chopping block. Squeezing a few more nickels from the ever-increasing billionaires in this country seemed never to be seriously discussed.

The Commonwealth of Virginia is in a fiscal situation that I hesitate to call a cliff for fear that the term might catch on, and we never hear the end of it. It is somewhat like the federal situation in that the legislative and executive branches are controlled by different political parties with the ensuing gamesmanship that encourages. The two are different in that the federal government is looking to increase its debt ceiling in order to pay its bills, and the Commonwealth is looking for ways to distribute an abundance of cash. Virginia does not face an impending deadline because it is midway in a biennium budget with an additional full year already budgeted. The challenge that those who govern Virginia have is what to do with the unbudgeted amount of cash it holds.

The last General Assembly session adjourned with no agreement among the governor, House of Delegates, and State Senate as to how the budget should be modified to reflect the increased revenues the state has been receiving. The economy is much stronger in the state than it was projected to be when the budget was constructed. The state currently has a balanced budget, a fully funded rainy-day provision, a reserve fund within the budget and a couple of billion dollars of monies unappropriated despite the needs in the state that go unmet.

It is now looking like there will not be a budget reconciliation this year. The government will continue to operate on the previously approved budget. A big consideration in the current political races is how Virginia’s budget challenges are to be resolved in the coming session. While I will not be there as I am retiring, I know that strong leaders like Karen Keys-Gamarra who shares my values and possesses strong leadership skills will be able to resolve the budget in the best interest of all citizens.