News

State Budget Takes Priority

January 27, 2010

At a town hall meeting with Del. Tom Rust (R-86) and State Sen. Mark Herring (D-33) in the Frying Pan Park Visitor Center, resident Charles McAndrew asked whether the state would engage in a zero-based budgeting process to identify anywhere that spending could be cut. He also asked whether the state General Assembly had considered an Office of Inspector General to conduct audits, investigations and evaluations of state business.

With this year’s legislative session just getting underway, the budget was the main topic of discussion at the meeting Saturday afternoon, which was attended by about 20 people, including a few staffers and three Boy Scouts from Franklin Middle School. Having already made major budget cuts over the last couple of years, the commonwealth is looking at a shortfall of more than $4 billion for the coming fiscal year.

RUST told McAndrews that the state did not use a zero-based budget process, but a bill had been submitted to change that. Neither he nor Herring sits on a committee responsible for budget review, he said, but he added, "I think they will go through and zero out unnecessary things." He said he had carried a bill a few years ago to create an Office of Inspector General for the Virginia Department of Transportation (VDOT), but it had not succeeded. While a number of agencies have internal review functions, Rust said, attempts to establish outside oversight have been unsuccessful.

Herring said he was introducing a bill calling for state spending accountability that would allow the public to see where tax dollars were going and was pushing to require the auditor of public accounts to take a look at other states’ budgets, moves that had brought immediate backlash from the Office of the Auditor. "You’re shareholders in the commonwealth. You ought to see where your money’s going," he said, adding that the state’s Data Point system, intended to track spending, was too difficult to use.

Both legislators agreed that the budget shortfall was the most pressing issue facing the state.

"We don’t borrow to meet operating expenses," Herring said, noting that the state was not allowed to operate at a deficit. "We will have a more austere budget as a result." He said he and Rust both had submitted bills to stop the state from freezing the local composite index (LCI), as former Gov. Tim Kaine (D) had proposed before leaving office. The index uses jurisdictions’ property values, income levels and other factors to determine how much school funding they get from the state. While politicians from Northern Virginia, which has always ended up paying for most of its education system, have long felt the LCI to be unfair, he said, the region would have gotten a break of an additional $65 million this year due to declining property values. Herring said Northern Virginia’s politicians of both parties would unite to see to it that the index was not frozen, although they would be outnumbered by representatives whose districts would benefit from a freeze.

"We’ve never seen anything like this before in Virginia," Rust said of the budget situation, noting that state spending would have to be cut by about another 10 percent overall. However, he said it would give the state an opportunity to reexamine its spending and the structure of its government. He noted that Gov. Bob McDonnell (R) had announced that he was appointing a high-level committee to do just that. While unpleasant cuts would still be necessary, he said, they would not be permanent and could be undone as the economy rebounded.

Rust pointed out that Virginia was one of the few states that still had a triple-A bond rating and had consistently been recognized as one of the country’s best managed, most business-friendly states with one of the highest educational success rates. "We will balance the budget, we will get through this, but we’re certainly not out of the woods yet," he said.

Maryann Laughton said she was unsettled by talk about undoing budget cuts when the economy rebounded and encouraged the legislators to keep the government scaled back, aside from looking for transportation solutions.

Rust noted that state funding for many nongovernmental agencies, such as museums and Wolf Trap National Park for the Performing Arts, had been eliminated, while others like free clinics had seen their state funding dwindle, though many residents would like such popular programs funded when the economy was strong.

HERRING said some ways of operating more efficiently would remain in place after the economy rebounded. For example, he said he was trying to do something about the fact that volunteers at community health centers did not get the same protection under the Tort Claims Act as employees.

Russ Martin wanted to know if anything could be done about the region’s transportation system. "There’s a great problem with exceeding capacity," he said.

Herring said he was disappointed that McDonnell had made a set of proposals to deal with the state’s lack of transportation funding during his campaign but had not included transportation among the priorities for the coming legislative session. He said he would continue to push to have the issue addressed, as he thought it was tied to the governor’s focus on jobs and the economy, since traffic gridlock could harm existing businesses and discourage others from moving to the state.

Rust said he too wished McDonnell had placed more emphasis on transportation, but he added, "We have an awful lot of work to do in this 60-day session." He said people close to McDonnell had said the governor was serious about holding a special session on transportation funding in the fall but wanted to have a somewhat solid agreement on the matter beforehand, since nothing had materialized from the last special session on the topic.

Many of the region’s legislators, he said, felt they should press forward with solutions so that, in the fall, "Northern Virginia will have, as I call it, a marker in the game." Rust said he and several other lawmakers from the area had put together a transportation bill that would make Northern Virginia a "construction district" that could raise its own revenue to pay for its own transportation infrastructure, much like the transportation package of 2007 tried to do. "Every penny of that money stays here," he said.

THE PACKAGE would consist of a sales tax hike of half a penny on the dollar, as well as raises in the guarantor’s tax on real estate sales and the commercial-industrial tax. This would only be to cover transportation construction in Northern Virginia. To pay for maintenance, the package proposes a statewide raise in fuel taxes of 1 percent a year for five years. This raise would not bring the gas tax to where it would be if its last hike, in 1987, had been tied to inflation, Rust said. Since rural areas also need road maintenance, if not construction, they could pay the fuel tax too, he said.

"Nobody likes more taxes. But you have to pay for this stuff," Rust said. However, he said the taxes would not kick in until unemployment was back down to the level it was in January of 2008, in order not to hike taxes during a recession.

"We’ve had similar attempts in the past that have not been successful," he said. "To be very candid, we are facing a crisis in transportation." He said the battle was not likely to be partisan so much as "an urban-suburban fight against the rural areas."

The bill is to be called the Comprehensive Transportation and Job Creation Act of 2010, Rust said.

Herndon Connection
By Mike DiCicco