“The economy of the past is over. Virginia must discard the entitlement approach and move to entrepreneurship. We must broaden the mix of economic opportunities, bring money back to Virginia, and turbocharge our economy.” That was the sobering, but positive, message delivered by Governor Terry McAuliffe to board members of the Virginia Association of Counties (VACo) and the Virginia Municipal League (VML) in Richmond last Friday. The governor noted that Department of Defense cuts had a dramatic impact on revenues for the state, causing Virginia to fall behind the economic recovery seen in other states across the nation.

Governor McAuliffe reiterated the message he had given to the General Assembly’s “money” committees that morning. The state budget is $346 million short in FY 15 (the fiscal year started on July 1), and is expected to be $536 million short in FY 16, when federal sequestration goes into full effect. Overall, the Commonwealth experienced just 0.4 percent growth in the last fiscal year. However, Governor McAuliffe said, more than 65,000 more Virginians are working now than when he was inaugurated in January. Another good news item was the federal decision not to deactivate an aircraft carrier in Norfolk. Deactivation would have meant a loss of 30,000 jobs for the Tidewater area, from sailors to suppliers, and the many businesses that support a carrier, the accompanying destroyers and the air squadron that performs those breath-taking carrier take-offs and landings in the middle of the ocean.

To deal with the immediate $346 million deficit we must use a collaborative approach, the governor said, and he wants local governments to have a seat at the table as proposed actions are developed for release by December 15. In response to his invitation for ideas, Fairfax County Board Chairman Sharon Bulova, who also is one of Fairfax County’s representatives on the VACo board, urged that any decisions about the shortfall be based on one-time cuts, not changes to state formulas that can create long-term consequences for local budgets. Formula changes in education funding in the past resulted in holes in local government budgets that make digging out nearly impossible. VACo and VML board members agreed with Governor McAuliffe’s stated objective of protecting taxpayer dollars and working collaboratively to solve a “Virginia problem,” as he termed it. His greatest challenge may be to engage Speaker Howell and the House of Delegates in the effort.

The governor’s presentation to the assembled elected officials was a last minute change from his published schedule. Rather than holding court at the Capitol, he drove to a suburban Richmond hotel where local officials already were meeting, to discuss the grim news. His noted ebullience was on display, as he nearly bounced with enthusiasm about potential future economic opportunities for the state, including genomic research and cyber security. There’s a lot of work ahead, and probably some pain, but no lack of positive thinking – on all sides.

 Penny Gross is the Mason District Supervisor, in the Fairfax County Board of Supervisors. She may be emailed at mason@fairfaxcounty.gov.