McDonnell: "Cautious" budget updates due to federal government - NBC12.com - Richmond, VA News

McDonnell: "Cautious" budget updates due to federal government

Posted: Updated:
RICHMOND, VA (WWBT) -

Virginia's budget picture is uncertain at best and that's all thanks to the federal government, according to Gov. Bob McDonnell.  This news came as he met with business and legislative leaders at the capitol Monday.

Right now, McDonnell says Virginia has to be both cautious and conservative when it comes to its money. Keep in mind, the Commonwealth already has a budget in place. This is the step where the governor updates the spending plan to make sure it reflects the current economic situation.

What happens in Washington doesn't necessarily stay in Washington. Any changes at the federal level, affect the fiscal picture here in the Commonwealth. Right now, it's a blurry fiscal picture at both levels.

"We're in a period of unprecedented uncertainty with what's going on in Washington," Gov. McDonnell said. "We have more questions than we do answers."

There are questions about what will happen regarding the fiscal cliff and possible major cuts to defense spending. Governor McDonnell hopes to have some more information in the next 45 days, but that's long after he has to make his budget amendments.

"At this point it's assumptions on what might happen," he explained.

To get a better idea of what might happen, he's relying on his "Advisory Council on Revenue Estimates." It is a group of business and legislative leaders that is considering a model with a slightly more pessimistic scenario in Virginia than for the national outlook.

"The critically important part of this process is getting their assessment of what's going on in the business community, consumer confidence, energy prices, all the things that ultimately contribute to our forecast of economic activity," McDonnell added.

When it comes to the state's economic activity, the governor has asked agencies to submit a plan for what they would do if asked to make 4 percent cuts.

"I've asked for it every year regardless of what I've thought the revenue forecast was going to be because I always want ideas from our agencies on what they can do better, more productively," McDonnell maintained.

He says it is important to keep in mind, that doesn't mean he is actually going to put those cuts into place.

While Monday's meeting was closed, one lawmaker who sat in says everyone is in agreement things are getting better, but no one is confident enough to celebrate just yet.

The governor explained while he has to present these changes to the General Assembly by mid-December, he might be looking at an entirely different picture in January when lawmakers return.    This means the Virginia budget will have to be more flexible than in years past.

Copyright 2012 WWBT NBC12. All rights reserved.

Powered by WorldNow