Looming federal cuts haunt budget officials

|
Photo - Virginia and Maryland officials are particularly worried about the economic impact of coming cuts to defense spending.
Virginia and Maryland officials are particularly worried about the economic impact of coming cuts to defense spending.
Local,Virginia,Steve Contorno

The Washington region's budget officials are frightened by the $1 trillion in federal spending cuts that loom over their local economies, but District officials are also fretting over the possibility of closing local schools while Maryland and Virginia worry about finding money to fix their roads.

Local officials voiced their top financial concerns in a survey of legislative budget offices released Tuesday by the nonpartisan National Conference of State Legislatures that shows the fiscal picture improving in most states even while serious concerns linger.

D.C. is one of 33 states in which officials expect the economy to remain "stable" over the next year. Maryland and Virginia are among the 11 that remain "concerned" about the immediate future.

Despite its sunnier outlook, District officials are warning that the increasing number of families choosing charter schools over the city's public schools could result in the closing of public schools this year. Chancellor Kaya Henderson will release a list of closing schools this winter, officials said.

"School closings will be a very public and contentious issue," District budget officials said in the report.

Finding shelter for the homeless is another top budget concern for the District, which spends more and more to place the homeless in hotel rooms because the city lacks affordable housing and the waiting list for housing vouchers is long.

The top concerns of Virginia and Maryland officials are the looming federal budget cuts, particularly a potential $500 billion reduction in defense spending that could roil the states' economies.

Transportation, a perennial problem in the traffic-choked D.C. suburbs, also remains a top issue in Maryland and Virginia.

Maryland officials said their transportation trust fund "lacks sufficient revenues for major capital expansion."

Virginia noted that its gas tax revenues can't keep up with increasing costs of transportation projects. The Virginia Senate this year approved a plan that would increase the gas tax in line with inflation, but that was rejected by the House. Gov. Bob McDonnell expressed a willingness to consider that option next year.

Maryland is one of a handful of states to actually reduce spending from 2012 to 2013. Spending is down 2.3 percent after increasing by nearly 13 percent in 2011. In D.C., spending dropped by 4 percent last year but increased by 5 percent in the 2013 budget.

Virginia's budget, meanwhile, has grown by about 6 percent over the past two years.

Tax collections are up across the region, a sign of the improving economy, the report found.

"We are moving away from the recession," said Dan Timberlake, director of the Virginia Department of Planning and Budget. "You'll see we're allowing our spending to grow at a more controlled and moderate pace [instead of] having to surge forward and ease back [like Maryland]."

scontorno@washingtonexaminer.com

View article comments Leave a comment