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Given all the disruptions which have overpowered the certainties in our lives brought about by the coronavirus, each of us probably starts each day wondering, “Will I be able to find another job if I am laid off?”, as well as, “Is my local government going to protect me economically?”

If you have asked those questions, you are not alone. 

In the current pandemic economic crisis, Gov. Ralph Northam is leading an approach called a “budgetary timeout” regarding the Virginia state budget developed during the 2020 General Assembly session.

The governor’s approach correctly centers on the belief that the health crisis in Virginia must be fixed first, then fix the Virginia economic crisis. It should be reassuring to every Virginian that this particular approach is the most efficient way to adjust the Virginia state budget for the next biennium because of the plethora of unknown variables brought on by the coronavirus and the unknown amount of financial assistance that will be provided to Virginia by the federal government. 

Gov. Northam’s budget “timeout” is defined as follows: “Pause all new spending, leave it in place but set it aside, then return later in the year to update the budget once the economic picture is clearer.”

It’s too soon to tally up the total costs of the COVID-19 pandemic because it’s still ongoing and creating supply chain interruptions, and a stunning number of Virginia businesses closing, resulting in many job layoffs. Gov. Northam’s budgetary “timeout” is similar to the 1991 “Virginia Budget Freeze” used by Gov. Doug Wilder due to Virginia’s constitutional mandate requiring a balanced budget.

Many Southside Virginia elected officials, by their silence, seem to have the belief that their budget process this year will not be as difficult as some have stated. Such thinking is extremely dangerous for the safety and quality of life of each person in the locality they represent. Because the federal government, as of April 21, has not passed a single piece of legislation funding each individual state, the National Governor’s Association has officially requested $500 billion in aid for the states.

There has been a long-standing belief by local citizens that members of the Farmville Town Council have historically had an overabundance of reliance on the 6,000-plus student population of Longwood University for an unending source of sales tax revenue. They also believe there’s been a lack of effort to broaden the tax base by not developing local industrial and business diversity. The current emergency COVID-19 shutdown of Longwood has proven such belief to be tragically correct.

Local job losses attributed to the Stay-at-Home Order from Gov. Northam adds to the critical loss of sales and meals tax revenue. For example, the Farmville meals tax revenue generates about $3 million, from which the Farmville Police Department’s $2.6 million budget is likely funded. A critical loss of this tax revenue places a large hole in the town’s budget. It’s crucial the budgets of all first-responder departments, especially the police, fire, and rescue departments, remain intact and even be increased. The pandemic crisis has resulted in an increasing number of calls of domestic violence, threatened suicides, street violence, etc.

Regrettably, some citizens are convinced that many elected officials in Southside Virginia are not taking the financial threat of COVID-19 seriously enough. In fact, some believe that less-densely populated regions might be at an advantage in avoiding COVID-19. Such thinking will have devastating consequences regarding health and economic security issues. 

The President of Longwood University, W. Taylor Reveley IV, is to be congratulated for his heartfelt letter he recently issued to the faculty and staff of the university regarding the current COVID-19 crisis.

He wrote, “For American higher education, the intensity of this challenge now goes beyond what anyone living has experienced in their own careers. It could rival the disruption faced by colleges and universities in the Great Depression and World War II.”

Reveley addressed the personnel reductions in the following manner, “… while we will hope and work tirelessly hard for the best, the crisis may deeply impact college enrollment nationally and in Virginia, and we may eventually have to contemplate measures such as furloughs or layoffs, as sadly other institutions are now.”

Reveley’s letter appears to make an effort to be supportive in a possible no-win scenario and demonstrates he is making every effort to control the situation rather than the situation control him. The boards of supervisors and town councils would be well advised to follow Reveley’s model and keep their constituents constantly informed.

During good economic times, Virginia generates 70% of its general fund revenues from individual income taxes and an additional 17% from sales tax payments. Obviously, when workers earn less, they spend less and, therefore, pay fewer sales and income taxes. Past revenue streams for all localities will be severely reduced. These are not good economic times.

Surprisingly, with incomplete revenue data, several localities have already announced a possible 10% increase in local taxes for the coming year. Such a move could place many families into a status of financial distress with no help available from state or local sources because of revenue shortfalls. One does not need a Ph.D. in economics to know that budget cuts and prioritizing must be used rather than setting up families for financial failure.  

As the late revered Chairman of the Virginia State Finance Committee, State Senator Hunter Andrews, told this writer, “Let’s pray elected officials know how to balance a checkbook during an emergency… including their own.” 

Without question, everyone must work together to “Prevent A Freefall of Farmville’s Fiscal Future.”

Dr. Lee Banton is professor emeritus, past president of the Piedmont Planning District and past president of the Virginia School Boards Association. He can be reached via email at cbanton541@gmail.com.