Last week, as a guest substitute for Sen. Whipple, I wrote about a very enlightening trip to Taiwan that may very well result in trade opportunities for both Virginia and Taiwan.

This week, as the economic news turns from bad to worse, increasing trade with a vibrant, high-tech economy that can not only supply workers, and can also supply products that we need, as well as buy products Virginia sells, sounds even more interesting.

In the meantime, we must brace ourselves for painful cuts at all levels of government. As the state and local revenue projections become known, there is little doubt that mutually beneficial relationships with other non-traditional partners can benefit both parties.

Unfortunately, localities and the state must begin now to determine how to reduce and eliminate spending. The Commonwealth and many localities have asked managers to review budgets and prepare specific reductions of 5%, 10% and 15% that they will be able have to live with.

In short, many of the difficult cuts will not be temporary, but permanent.

I know of no one who is proposing tax increases to reduce the pain of permanent staff cuts and service reductions.

And, the transportation funding shortfalls that resulted from partisan refusal to raise revenue to keep this critical element of any economic development strategy from falling further behind becomes more and more important. With the party-line vote (all Republicans but one voting “nay” in the House) to kill a compromise transportation funding measure, it appears that no additional state revenues will be available for at least two years.

We may even lose Federal funds because we do not have the matching funds required to release them.

School funding formula also at risk

Historically, the implicit compact between state and local governments has been that the state pays 55% of the cost of public education, and localities pay 45%. Unfortunately for Northern Virginia, the 55% has been allocated

in a manner disadvantageous to Fairfax County, Falls Church and other jurisdictions north of the Occoquan. My bill last year to increase the allocations for jurisdictions with large numbers of students who are native speakers of languages other than English would have begun to remedy that problem. It received little support in the House.

As I have written before, some of the leadership, at least in the House, want to reduce the state obligation to public education funding. To do that, they want to re-define the “actual cost” of education. Today that definition includes all expenses incurred the previous year by localities and the state.

Some members of the House leadership want to re-define reimbursable cost to include only those expenses approved by the General Assembly. I am afraid that argument will become more attractive as the state faces enormous shortfalls in revenues.