From The Bolling Report - March 9, 2008
The 2008 session of the Virginia General Assembly was scheduled to conclude on Saturday, March 8th. Unfortunately, the General Assembly was unable to reach agreement on the adoption of a new state budget for the 2008/2010 biennium.
Because of this impasse, the General Assembly session has been extended until Tuesday, March 11th. At that time legislators will return to Richmond to take final action on the budget. In the meantime, budget conferees will meet to settle differences on several important issues.
At present Senate and House budget conferees are divided on Governor Kaine’s proposed expansion of the state’s pre-kindergarten program, mental health funding, state employee and teacher pay raises, bonded indebtedness and several other issues.
While the adoption of a state budget is never easy, I believe that most of the budget challenges the General Assembly has faced this year came about because Governor Kaine introduced a budget in December that was fiscally irresponsible.
Even though the Commonwealth’s economic growth has slowed considerably, Governor Kaine proposed a budget that included hundreds of millions of dollars in spending on new and expanded government programs.
The Governor then sought to pay for this new spending by taking an excessive amount of money out of the state’s Rainy Day Fund, redirecting lottery profits and transportation dollars to the general fund, maxing out the state’s credit card on future debt and embracing unrealistic future revenue projections.
While it is disappointing that legislators were unable to resolve these budget issues on time, it is important for us to adopt a budget that rests on a solid fiscal foundation. I continue to encourage the budget conferees to base their final budget on the following important principles:
- Minimize spending on new and expanded government programs. During challenging economic times, we should not authorize any new government programs, and we should direct increases in existing programs to the core responsibilities of state government.
- Minimize withdrawals from the state’s rainy day fund. The Senate has proposed withdrawing $460M from the rainy day fund, while the House of Delegates has proposed withdrawing $250M. This is too much. We should minimize rainy day fund withdrawals to preserve the rainy day fund for future economic emergencies.
- Do not redirect lottery profits to the general fund. The constitution requires that lottery profits be returned to local governments for use in public education. We should not use this money to pay for other government programs.
- Do not redirect transportation dollars to the general fund. $180M was earmarked for transportation construction during the 2007 session of the General Assembly. I believe that we should continue to use this money for transportation construction, and not redirect it to other government programs.
- Ask state agencies to make further reductions in their budgets. With the exception of core responsibilities like education and public safety, we should demand further spending reductions from state agencies to help balance the budget.
- Base the budget on realistic revenue projections. With our economy currently growing at a rate of about 2.5%, it is very risk to base a budget on future economic growth of almost 7%. If we fail to achieve these overly optimistic revenue projections, we will face continuing budget shortfalls in future years.
My hope is that the budget conferees will be guided by these principles as they continue their deliberations. If they are, it is still possible to adopt a budget that is fiscally responsible and has widespread bipartisan support. If they do not, they could be creating a fiscal house of cards that could collapse under as at any moment.
In challenging economic times, government should do what families and businesses must do – we must prioritize our spending carefully and we must tighten our belts and spend within our means.
Finishing work on a new state budget is not the only issue that remains unresolved in Richmond. Two other important issues continue to confront the General Assembly – judicial appointments and transportation.
Judicial Appointments Remain In Doubt
Most Virginians don’t get terribly excited about judicial appointments, but making certain that we appoint qualified and capable jurists is one of the General Assembly’s most important constitutional responsibilities.
During most sessions of the General Assembly, judicial appointments are handled in a fairly routine fashion. While disagreements do occasionally arise, they are usually resolved. Unfortunately, the process has become much more difficult this year.
Most of the judicial impasse has arisen in the Senate, where the new Democratic majority is trying to lock Republicans out of the judicial selection process contrary to the historical practice and Rules of the Senate.
The Rules of the Senate require that in order for anyone to be nominated for a judgeship the Senators in that judicial circuit must agree on who the nominee will be. If the Senators in the judicial circuit cannot agree on a nominee, the Rules of the Senate provide that no nomination will be made.
When Republicans controlled the Senate, this was the practice. After last falls elections, the new Senator Majority Leader, Senator Richard Saslaw (R-Fairfax) assured Republicans that this practice would continue. Unfortunately, the Democrats did not keep their word.
During this year’s judicial selection process, Democrats have tried to nominate judges in judicial circuits where Republicans do not agree on the nominee. In fact, in some parts of the state Democrats have tried to nominate judges in judicial circuits where every elected Senator is a Republican.
Obviously, this is contrary to the Rules and customary practice of the Senate and Republican Senators have taken a strong stand against this change in the Senate’s longstanding history of bipartisan judicial selection.
As a result, the General Assembly has been unable to move forward on several judicial appointments, including appointments to the Virginia Court of Appeals, State Corporation Commission, Workers Compensation Commission, Judicial Inquiry and Review Commission and a slate of circuit and general district judges.
Amazingly, the General Assembly agrees on several of these appointments, but Senate Democrats have taken the position that they will fill no judicial vacancy unless they can fill every judicial vacancy. This is an extreme example of the arrogance of power.
I remain hopeful that the General Assembly will be able to find a way to resolve this impasse. However, to do so Senate Democrats are going to have to keep their word and comply with the Rules and customs of the Senate.
The solution is simple – the General Assembly should move forward with appointments on those judgeships where there is agreement among the members. These judgeships should not be held hostage to the partisan antics being practiced by Senate Democrats.
Transportation Funding Likely To Be Subject Of Special Session In April
One final issue also remains unresolved in Richmond – funding for Virginia’s beleaguered transportation system.
During the 2007 legislative session, the General Assembly passed a statewide and regional transportation plan that was estimated to raise $1.2B annually for transportation in Virginia.
On the statewide level, $600M in additional funding came from the implementation of abusive driver fees (which have now been repealed), a $10 increase in annual vehicle registration fees, and increases in registration fees, fines and penalties for heavy trucks.
On the regional level, an additional $600M in funding ($400M in Northern Virginia and $200M in Hampton Roads) came from a series of tax and fee increases that were to be enacted at the discretion of the Northern Virginia and Hampton Roads transportation authorities.
However, last week the regional components of this plan were declared unconstitutional by the Supreme Court of Virginia. The Supreme Court ruled that the General Assembly could not delegate its taxing authority to an unelected body.
It appears likely that Governor Kaine will call the General Assembly into a Special Session in April to decide how to replace the $600M in transportation funding that has been lost in Northern Virginia and Hampton Roads by this ruling.
Already, various parties in Richmond are taking sides on how this issue should be resolved.
Governor Kaine and General Assembly Democrats have called for a “statewide solution.” In fact, Senate Democrats have already proposed increasing the state gas tax by 5 cents per gallon and increasing the motor vehicles sales tax (titling tax) from 3% to 3½%.
In addition, Senate Democrats want the General Assembly to propose a series of tax increases in Northern Virginia and Hampton Roads, including increases in the regional sales tax, grantors tax, transient occupancy tax (NVA), and gas tax (Hampton Roads).
However, Republicans have argued that the focus needs to be on replacing the revenue that has been lost as a result of the Supreme Court’s decision on the regional components of the 2007 transportation plan.
However, Republicans are divided on the approach that should be taken.
Some Republicans propose having the regional tax increases struck down by the Supreme Court implemented by direct action of the General Assembly.
Some Republicans propose giving local governing bodies in Northern Virginia and Hampton Roads the ability to enact these tax increases at their discretion.
Some Republicans object to imposing any tax increases whatsoever, arguing that additional dollars should be provided to transportation from existing revenue sources once the economy begins to grow again.
I would like to hear from you on this issue. How do you think we should approach the future of transportation funding in Virginia? If you would like to share your thoughts with me, you can contact me at email@example.com.
While this edition of The Bolling Report has discussed some of the unresolved issues still pending before the General Assembly, the General Assembly did take final action on several other issues over the past two weeks. I will discuss these issues in next week’s edition of The Bolling Report.
Cross-posted at SixtyFour81.com