RICHMOND, Va. (WRIC) – When he addresses state lawmakers on Friday, Virginia Governor Terry McAuliffe is expected to deliver a shortfall of more than $800 million in the current fiscal year and a more than $600 million shortfall the following year, totaling around $1.5 billion.
The reason, he says? Lower incomes across the state.
“The issue we’re facing and many states are facing is the withholding income,” McAuliffe said. “Older people are retiring at higher wages and they’re being replaced.”
The governor and lawmakers say jobs are being replaced by part-time workers or full-time workers with lower salaries. Originally, forecasters expected the state’s economy and incomes to grow more but are now projecting much slower growth than first thought.
“Not going up at three percent, they’re going up at one percent,” Delegate John O’Bannon told 8News Reporter Mark Tenia.
O’Bannon, who sits on the house appropriations committee, says while it’s concerning, it’s not as bad as the $2.4 billion shortfall the state faced two years ago.
“I think we are in better shape than we were some years ago,” O’Bannon said.
He says they’ll ask state agencies to come up with places they can cut money, but have already taken some action.
“We’ve already had to put the state employees raise on hold,” O’Bannon explained.
As for preventing another shortfall in the future, the governor says it’s about filling positions.
“We’ve got to fill these high paying jobs,” McAuliffe suggested. “17,000 cyber jobs open here now in Virginia starting pay 88,000.”
The governor says he will protect education from seeing cuts.
“We’ve got to get on the game here in our education to build that workforce of the 21st century,” McAuliffe said.
Meanwhile, O’Bannon says they’ll have to have a tighter grip on the purse strings.
“The message there is that we need to tighten our belts going forward,” he said.
The governor will address the House Appropriations and Senate Finance Committees in a joint meeting Friday morning at 8 a.m.