Topic of the Week: State bailouts

Q.E.D. is starting something new: a topic of the week that our opinion editors post their thoughts on and readers can respond to, both with our new poll and with blog comments.

This week, the topic is the failure of the Virginia General Assembly to produce a balanced budget, which Gov. Tim Kaine (D) has brushed off due to the passage of the economic stimulus package. In an article in the Richmond Times-Dispatch, Kaine is quoted as saying, "What that means near-term is we don’t have to make any more cuts."

States are required by law to balance their budgets. The Richmond Times-Dispatch is reporting that the state budget is at least 3.2 billion dollars short. Is a federal bailout a legitimate way to balance a state budget? The federal budget is obviously allowed to carry a deficit and that is currently not going very well.

Along with all of the other kinds of debt the stimulus package incurs, should it take to carrying state debt as well? Is that a violation of the state constitution since no balanced budget has yet been produced? Or is federal help warranted in hard times to smooth things over for the states? These are some of the questions our opinion department will be tackling this week.