Bolling: Difficult choices loom on budget
By JR Hoeft | Monday, February 15th, 2010 | PolicyLt. Gov. Bill Bolling recently penned this commentary on the budget challenges facing Virginia:
The biggest challenge facing the General Assembly during this year’s legislative session is the adoption of a new state budget for the 2010-2012 biennium.
In December, outgoing Governor Tim Kaine introduced a budget that sought to close a projected $4B shortfall through a combination of $2B in budget cuts and $2B in tax increases. However, it is apparent that Governor Kaine’s tax increase proposals will not survive legislative scrutiny.
During his first speech to the General Assembly, Governor Bob McDonnell made clear that he will not support a budget that includes higher taxes. We simply do not believe that it is appropriate to raise taxes on families and businesses in the midst of the worst recession in 60 years.
Likewise, the General Assembly does not appear to be prepared to support high taxes. In the House of Delegates, Governor Kaine’s tax increase proposals have already been rejected by a vote of 97-0; and even in the State Senate, where Democrats hold a 22-18 advantage; it does not appear as though they can produce enough votes to support higher taxes.
Given the lack of support for higher taxes, it is apparent that the only way to balance the budget is through additional spending reductions. While reducing government spending is not easy, it is sometimes necessary.
Many of the Commonwealth’s current financial troubles are the result of bad decisions we have made in the past. To put it simply, we have been spending money we didn’t have to make promises we couldn’t keep.
We sought to pay for these promises through overly optimistic revenue projections, raids on the rainy day fund, spiraling amounts of state debt and federal bailout dollars. While these types of budget gimmicks can work for a while, sooner or later the underlying structural imbalances in the budget must be corrected.
In addition, because of the national recession state tax collections have declined significantly. Tax collections declined by 9.2% last year, and tax collections are projected to decline by an additional 3-4% this year.
During tough economic times, families and businesses have to prioritize their spending decisions and make certain they are not spending more money that they are taking in. Government must do the same.
Unfortunately, some seem to think that government should be immune from these fiscal realities, but it is not. When revenues decline, so must spending. It really is that simple.
While reducing state spending by an additional $2B will not be easy, it is important for us to keep these spending reductions in perspective.
Based on current projections, during the upcoming biennium state revenues (General Fund) will be $14.5B in 2010-2011 and $15.2B in 2001-2012. The last time state revenues were at this level was in 2006, when total state spending was $14.7B. So, in order to balance the budget through spending reductions we will have to return spending to where it was in 2006.
In order to achieve this goal, spending in the first year of the upcoming biennium will have to be reduced by an additional .7%, and spending in the second year of the budget will have to be reduced by an additional 5.8%.
While I don’t want to minimize the significance of these spending reductions, these are clearly achievable goals and the reductions must be made. There is no other alternative.
The Senate and House of Delegates are scheduled to release their respective budget recommendations in the next two weeks. We look forward to seeing their recommendations and working with them to reach an agreement that can receive broad bipartisan support.
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About the author
Conservative to the core; liberal with his opinion! J.R. has been involved in politics for over a decade and has worked on several campaigns in Hampton Roads. He has served on the Executive Committee of the Republican Party of Chesapeake and the Central Committee of the Republican Party of Virginia. He is also the director of “Blogs United” in Virginia. E-mail J.R.. Follow J.R. on Twitter.
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20 Responses to "Bolling: Difficult choices loom on budget"
Why don’t they go through an exercise in “restructuring” the revenue, budget and debt, much like a judge would force a business to go through in bankruptcy? “Restructuring” would minimize or eliminate politics in the process by first eliminating “political patronage” programs, projects and sacred cows and prioritize spending according to public needs.
This would quickly match the budget to debt and spending just like we normal people have to go through if our spending and debt get ahead of our income.
There are politicians in the legislature who are lawyers and have handled “restructuring” and understand the concept. However, like most people, the political will to support this won’t happen until Virginia’s credit rating is trashed and the repo men show up and start hauling furniture and fixtures out of the state capitol and Governor’s mansion.
This is what happens when you have a bifurcated budget process; that is, you only look at one side of the equation. In a week or so, when constituients around the Commonwealth realize the full extent of the effect of job loss on state and local employees, the devastating effect these firings will have on families and on communities will reign down on the delegates and senators who will bear the full brunt since the Governor has been largely missing in action. Since he won’t face re-election, they may want a bit of cover.
Mike,
How many jobs do you think are going to be eliminated that are currently being filled with breathing human beings?
I don’t know for sure, but I would think the GA probably will cut jobs that are vacant first.
I’m not saying you’re wrong, I just wonder what the full extent is going to be.
J.R.,
They’ll try. But they need savings now. Cutting vacant positions does little to produce immediate savings because vacant positions don’t draw paychecks or get benefits. To save money now, you’ve got to cut real people.
Well JR, anyone who knows is not talking right now, and from what I hear, it is the republican delegates who have suddenly realized the draconian effect of their anti tax idelogy. I have heard estimates of 50,000 jobs in state and local government, which gives an entirely new definition to the term “jobs Governor”. But of course, I guess Bill Howell knows, but he ain’t talking.
Mike,
It might be a lot, it won’t anywhere near 50,000. That’s crazy talk.
Yes, perhaps you are correct. It may be 50,000 jobs between state and local government, and the jobs lost in the local communities because of the layoffs in government. MJB sends!
Steve, that’s not quite the way it works with vacant positions. Positions aren’t approved unless the money is set aside for them. In other words, funds for salaries and benefits are set aside for each position. So, eliminating that position will reduce the overall budget and those funds can be directed elsewhere.
Still, you’re correct that there aren’t enoug vacancies to make up the difference.
Well, I don’t think the moniker “Jobs Governor” applied to McDonnell creating government jobs, but private sector jobs. As for the City of Virginia Beach cutting staff, as of today, there is not enough information from the state budget process yet to make that determination.
Well yes, J.M., exactly. This budget process, that may cause the loss of tens of thousands of jobs, is being conducted in secret, often at night, in committee and sub committee meetings, with no public input nor discourse. This process is even making Legislators nervous, and if that is the case, how do you think the impending tsunami is effecting local government officials?
J.M.- To people who have them, government job are JOBS. They support families, they pump money into local economies. And this state is about to do the worst thing government can do during a recession, cut jobs. Tha deepens the recession and makes unemployment worse. As far as “Bob for Jobs”, he’s going to start off in negative numbers, because those public sector jobs cut on his watch count.
Exactly, Steve. Government jobs are still JOBS. And any loss of jobs is going to hurt like hell. More folks will go on unemployment, more houses will be foreclosed, tax revenues will continue to plummet, more people will leave the state for work elsewhere, etc. etc. I’m not saying there isn’t bloat in the government, but we all need to remember that cutting government jobs is not as easy or as benign as some are implying. It seems that the legislators in Richmond are just now realizing that, and they’re pretty freaked out, from what I’m hearing.
Steve,
I AM a local government employee. What do you expect the man to do (Been in office 1 freakin month)? Because of the Kaine administration’s incompetance (Jody Wagner’s rosy tax estimates on which this budget was determined), almost $7billion has been cut from the budget so far, which includes the current $2billion shortfall.
There isn’t a Republican alive that is going to raise taxes during a recession, especially to keep government jobs. But I am sure there are Democrats stupid enough to do it. Read the post from Bolling. We elect men and woman to make tough choices on these issues and now they are.
What that means for me and my political beliefs is this…I am willing to have my job cut if it means that government expansion is cut back, it operates within its means and stays out of my wallet. I look at ads for employment all the time and there are jobs out there (even the public sector). It may not be ideal, but it pays the bills until the economy gains traction (already has started) and public/private sectors will be largely available again.
JM,
We agree that the economy has begun to pick up. The reovery would be going faster and the unemployment rate would be better if we didn’t have 50 state governments essentially operating “anti-stimulus” packages by cutting public sector jobs, which also, of course, effects private sector companies that bid for state contracts to build roads, college buildings, etc.
So Mike Barrett hears that GOP members of the House are nervous about upcoming budget cut announcements. Mike, I didn’t know you had that kind of relationship with any GOP House members. Perhaps you could shed some more light on which members are feeling queasy and what exactly they are saying. In other words, I call bu**sh**. You’re just making stuff up.
Laura, you really ought to read more and get out more. MJB sends!
Well here we are, half way through the GA process. So far our fearless leaders have managed to pass 200+ celebrations, commendations and appointments to pander to their ‘constituents’. They have also been busy little bees addressing weighty issues such as whether a person can possess deer antlers. Important topics like the budget must wait because the last minute back room, middle of the night deals aren’t ready for public consumption.
Meanwhile the cities and counties are breathlessly wondering whether the next check they write is going to bounce. If the GA politicians have their hearts pounding in their throats as Mike reports, imagine the angst their local brethren have when presenting budget numbers to the public based on little more than a wild ass guess. So go ahead, alienate the voters, make a few more independents. Then we will see how things play out starting in May or so.
Mike knows nothing about the status of the hearts or throats of the GOP GA members. I think many of them are refreshed that they finally get to give the state government and its budget the enema it so badly deserves. Will there be cuts, yes of course. But the GA has needed to get serious about weeding out wasteful programs for a long time.
And regarding the ignorant comments about the time of day that the money committees do their work, of course they do it in the evening. During the morning there is committee work, afternoon is session, then more committee meetings, then dinner (often sandwiches) and appropriations work. That’s how the system works in every state capital with short legislative sessions. If you’re concerned, go to Richmond and check it out for yourself. If you feel a lack of transparency, call you Democrat delegate or senator and ask them what’s going on.
I have done an informal poll with my patients for the last couple of weeks.
(1) I asked if they knew what the projected Va budget deficit was. Not a single person knew.
(2) I asked them to guess what the projected deficit was. Most people guessed in the 5 to 10 million dollar range. 100 million was the largest guess.
(3) I told them what the projected deficit was. Everyone was just stunned.
(4)I asked them if they favored increased taxes to cut the deficit. No one wanted higher taxes. In fact they were strongly opposed to higher taxes.
So for me the only question is if you simply cut 10% across the board or use the Americans for Prosperity budget recommendations.
Well anyone who voted for Bob McDonnell thinking he was moderate is about to be educated on that topic. Moderates don’t usually take benefits from children, the sick and injured, nor the elderly and infirmed. Education, no matter, most of Bob’s elite republican friends go to private schools. State parks, who needs ‘em when you own three acres in a gated enclave. Public health, have any of Bob’s friends actually ever seen the inside of a clinic? Payment for those who provide respite services for those who care for an infirmed, elderly person in the home, who needs that; just put them in an institution. Libraries, heck, Bob’s friends download books to their kindle and have no need of a public library. Health insurance for kids whose parents can’t afford it, we have too many in that program already. No wonder this budget has been kept secret; thank goodness some republican in the know had the conscience to leak it to the press. MJB sends!
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