Just months after slashing $1.1 billion in road and transit projects from the state's six-year transportation spending plan, Virginia officials say the state's fiscal situation is so bad that they will have to hold a special meeting to cut even more.
The Commonwealth Transportation Board will meet in November or December to revisit the plan, The Washington Post reported. Estimates show a shortfall in the maintenance fund of $740 million over six years. Under state law, maintenance projects receive priority over new construction, so planned capital improvements will have to be delayed to shore up the maintenance account. Virginia also must come up with $50 million a year in dedicated funding for the Washington Metropolitan Area Transit Authority under the terms of legislation approved by Congress last week that authorizes $150 million a year in federal funds that have to be matched equally by Virginia, Maryland and the District of Columbia.
Virginia relies on gasoline, motor-vehicle sales, license, and registration taxes to fund transportation. Gas-tax collections are at a 20-year low, according to the board, while the number of vehicles sold is forecast to drop. The average price of a newly registered vehicle has also tanked.
"Nobody considered the dive in car sales and the types of car sales," said Deputy Transportation Secretary Barbara Reese, noting the plummeting sales of pricey and fuel inefficient sport utility vehicles. "SUVs are more expensive than passenger cars. Cheaper cars mean less taxes."
Other states are resorting to cost-cutting measures including four-day workweeks. Some offices in Washington state began compressed work schedules this week with four 10-hour shifts instead of the typical five 8-hour shifts. The Department of Community Trade & Economic Development is among those agencies that will close Fridays to save on energy costs, the News Tribune reported. The schedule change came in response to an order by Gov. Chris Gregoire for agencies to trim operating costs by 1% and freeze hiring.
Arizona Gov. Janet Napolitano vowed Wednesday to freeze all state contracts larger than $50,000 until they can be reviewed. Napolitano said the state must "ensure we are only spending what is mission-critical this year," the Arizona Republic reported.
With its depressed housing market, Arizona has been particularly hard-hit by the national economic downturn. Legislative budget officials have said the state shortfall for this fiscal year could range between $550 million and $1 billion. That would come on top of a nearly $2 billion shortfall that legislators closed last spring.
