Why not wait to pass budgets?
Buckingham County approved its budget April 20. Cumberland County is set to vote on its budget April 28 and Prince Edward County has a public hearing scheduled on its budget the same night.
In this time of great uncertainty with so many questions about our economy and where we stand, why are our localities moving so fast to solidify budgets that almost certainly will have to be reworked in the coming months?
Localities don’t have to set a tax rate or pass a budget until June 30. Local governments that include school systems have to have the school portion of their budget set 30 days after the state budget is finalized or May 15 at the earliest.
Why are our local leaders mostly proceeding as normal in a budget season that is anything but typical?
Currently, no one knows if Virginia is going to receive help from the federal government beyond the scope of the $1.65 billion in the CARES Act designated for pandemic-related expenses only. The money cannot be used to replace lost revenue. That has some states talking about bankruptcy. The impact of the pandemic on Virginia’s finances is expected to be severe. That pain will also filter down to the localities.
The Town of Farmville has taken a different approach than its colleagues. The town has canceled a budget work session and seems to be waiting to find out more information before trying to work out a budget. The town has already projected an $881,000 shortfall for this fiscal year. That is before we get to the next fiscal year.
That additional time could be valuable. We may know in a couple months to what extent Longwood University and Hampden-Sydney College can return to normal in the fall. We will know if the governor lifts business restrictions on May 8 or if the order to close non-existential businesses will have to continue longer.
Chesterfield has furloughed 500 city employees. Norfolk has furloughed 550 and Staunton has announced layoffs of 64 part-time employees. Other municipalities are taking actions and making adjustments to the impending economic crisis.
Our area governments should step back, take some time and look at the current reality. They should take in as much information as they can while there is still some time to adjust.
No one gets extra credit for getting the budget done before June 30. Anyone who passes a budget right now is only fooling themselves while wasting paper and time.