Virginia Falls $266 Million Short on Budget Estimate

Low-wage and part-time jobs blamed for discrepancy

Terry McAuliffe
Terry McAuliffe / AP

Virginia fell $266.3 million short of its revenue forecast this year, a shortfall that has led Democratic Gov. Terry McAuliffe to defer promised raises for state employees and state-supported local employees.

McAuliffe announced the shortfall on Friday, blaming low payroll and sales tax receipts for the discrepancy. The state’s $18 billion in revenue collection set a new record for annual receipts, but raises for state employees that were set to take place in December have been put on hold due to the disparity between tax revenues and official forecasts.

Tax revenues fell short of the forecast by 2.4 percent, a disparity the governor's office said was caused by low-wage or part-time jobs created in Virginia, according to WTOP. McAuliffe ran for governor in 2013 by promising to focus on "job creation and common sense fiscal responsibility."

David Rutz breaks down the most important news about the enemies of freedom, here and around the world, in this comprehensive morning newsletter.

Sign up here and stay informed!

Virginia Republicans seized on the announcement, saying it is proof that Virginia’s economy under McAuliffe is failing.

"The shortfall proves that Virginia’s economy is not booming, despite several suggestions to the contrary, while the unemployment rate might make for a good press release, the truth is Virginia’s economic outlook is worrisome," said Kirk Cox, the Republican majority leader in the Virginia House of Delegates.

"Unfortunately, Virginians are trading high-paying jobs for lower-paying jobs or are working part time when they should be working full time," said Chris Jones, chairman of the state legislature’s appropriations committee.

By law, Virginia has to re-estimate general fund revenues by Sept. 1 because the shortfall exceeded the estimate by 1 percent.

McAuliffe scheduled a meeting of the Joint Advisory Board of Economists on July 15 to consider a revised revenue forecast from the Department of Taxation.

He also is scheduling a meeting of the Governors Advisory Council on Revenue Estimates to consider fiscal scenarios for the new forecast, to be submitted to the House Appropriations and Senate Finance committees on August 26 in advance of the Sept. 1 deadline, the Richmond Times-Dispatch reported.