Virginia’s rainy-day fund is at capacity and available for downturns in the economy. Governor Northam wisely recommended to the General Assembly to not spend all the federal monies available for COVID relief but rather hold some monies in reserve should the economy slow down. Virginia budget revenue projections are not set politically but rather are the work of recognized economists and persons who are knowledgeable of economic matters using available data even though they likely do not live in Virginia.
If revenue can be predicted with good data and economic models, the expenditure side of the budget is often decided in a pull-tug match among established programs, political favorites, special interests and advocacy groups in a political setting. Too often established programs continue their funding with a small inflation bounce but without the scrutiny needed to determine their effectiveness. Much of the budget is taken up with the continuation of existing programs. New programs with a price tag find it difficult to break into the regular budget cycle. Sometimes new programs or initiatives are funded as pilot programs to see how they will perform before being added to the baseline budget.
One program for which there is an abundance of evidence of its cost effectiveness that only recently is starting to break into consideration for serious long-term funding is preschool or early education. The evidence has become overwhelming that spending on preschool education should be considered an investment because of its high rate of return. There are numerous studies conducted by business groups that might otherwise be skeptical of new government programs showing that early education/preschool programs pay for themselves over the long run in avoided costs that are necessary when preschool education is not available. A decades-long longitudinal study, the Perry Preschool Program Study, found that preschool programs provide a $7 to $12 return for every dollar spent on preschool programs. The returns come from the savings realized when remediation programs are not needed as children come to school prepared and ready to learn. There are longer term gains as children who attend quality preschool programs are likely to be successful in life generally, in employment, and in personal satisfaction.
Over the last few years Virginia has been ramping up its funding for preschool programs based on the research and on the observable difference by students who get an early start at learning. Preschool funding gets a great rate of return monetarily, but its saves money in other areas of the budget and in the personal lifetime satisfaction of students who are enriched by their experience of getting a head start!