At the State Senate annual Finance Retreat two weeks ago, staff updated the State Senate on Virginia’s economy, projected revenues and significant budget issues expected during the 2016 session to begin on January 13. The news is a mixed bag.
First, Virginia’s economy is still struggling. Thanks to the “Sequester,” large, across-the-board, federal budget cuts, federal spending in Virginia is down by 33 percent over just last year. That’s $24 billion fewer dollars coming into the Virginia economy. Not surprisingly, economic growth has been flat statewide. Twelve percent of homes are still short sales due to stagnant home prices and our predicted economic growth for 2016 is about one-third less than the national rate.