Lots of reasons.
But one of them was the fiscal cliff and sequestration, which got an immense amount of coverage here because of how much military spending goes on in this state (including my wife's paycheck). Nobody was running on making the fiscal cliff happen, of course. Although both candidates brandished austerity talk throughout the campaign, there was one candidate who seemed particularly enthused about it. And with sequestration looming, that was not encouraging for a lot of people.
Barkley Rosser discusses the reaction to the fiscal cliff in Richmond here (Rosser teaches at one of our fine institutions of higher learning, out in the Shenandoah Valley, where my sister went to school [unfortunately she was not lucky enough to take economics there]). He has a couple points - first reminding everyone that it's a little exaggerated. It's not so much a cliff as it is a steeper-than-we'd-like-downward-slope that we hit in January. Still, when you bring expectations into account I'm not entirely reassured. He also points out that Medicaid - because it relies a lot on state matching and discretion - is likely to be the biggest casualty of all this.