Just hours after returning from his trade mission to Israel and India, Governor McDonnell met privately with his Advisory Council on Revenue Estimates. The group of public and private-sector leaders are helping the Governor gauge the levels of economic activity expected over the next two years and the revenues that the state could expect to reap as a result.
For 19 of the past 20 months, state revenues surpassed those of last year. Nevertheless, officials are saying they won’t be sufficient for rising costs in public education, Medicaid, and the state pension fund. Governor McDonnell said other challenges will also have an impact.
“Just returning from an overseas trip, I certainly can tell you that the rest of the world is concerned about the U.S. economy, is concerned about the unpredictability and uncertainty that’s coming out of Washington. We saw that yet again this week with the failure of the Super Committee to do what it was instructed to do. There are crises in Europe and other places with debt and deficits that certainly have an impact on the U.S. economy,” said McDonnell.
He said none of the economists consulted had a rosy outlook.
“There were seven of them that recommended the standard forecast, five that chose the ‘standard-minus,’ and two recommended the recession scenario for the U.S. economy.”
Some officials say budget cuts will be needed, but will likely be targeted and not across-the-board. Agencies have been preparing 2, 4, and 6% reduction plans. The Governor unveils his budget in December.
–Anne Marie Morgan