Revenues in Virginia up by another $152 million
By D.J. McGuire | Friday, February 4th, 2011 | Policy
Governor McDonnell informed the legislature that revenues are expected to be $152 million higher than was initially believe just a couple of months ago (WaPo).
For the most part, McDonnell asked that the money be used prudently: $50M to the “rainy-day fund,” $38M to scale back the accelerated sales tax nonsense, and another $38M to get a head start on repaying the VRS loan.
About $19.2M was left without any recommendation – at least from the Guv. If they asked me, there is the little matter about unfilled judges . . .
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Former candidate for Board of Supervisors in Spotsylvania, current blogger, economics teacher, and long-rumored windbag. There are two causes closest to the heart: steering the country away from the social democratic nonsense that is sinking Europe, and convincing the rest of the "rightosphere" that the NBA really is a joy to watch.
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21 Responses to "Revenues in Virginia up by another $152 million"
Agree on the unfilled judgeships.
Also, let’s completely eliminate the “accelerated sales tax nonsense.” Borrowing from next year’s tax revenues to balance this year’s budget is deficit spending.
This is a sign of an impending recovery. As was the case under Warner BEFORE his silly tax increase went into effect.
I am happy this will insulate McDonnell from absurd allegations that his policies are bad for the economy. I just hope the Governor doesn’t try to take credit for the recovery itself.
I hope we can pay off the VRS loan so the Democrats will stop whining about it.
It is interesting how dissecting individual nominal aspects of the budget can frame a positive attitude of supposed frugality. However, in the macro aspect, the overwhelming deferral and financing of retirement payments coupled with extensive levering of billions for transportation, without the assured guarantee of federal contributions, over shadow this in spite of the political spin. The rationale of “taking advantage of ‘low’ interest rates and construction costs” is synonymous with a spouse over spending the family’s limits declaring, “There was a sale. Look, how much money I saved us!” Unfortunately, going broke to save money is not only imprudent, it is totally supercilious.
McD for president! Bob gets it and surrounds himself with top notch people. He is a proven well organized and principled leader and team builder working across the aisle. If Reagan were alive today he would liokely want to shake Bob’s hand… speaking of which, Happy Birthday to the Gipper!
Sorry but would rather see a Republican ticket of West/Christie for 2012. Here is a tape of Bert as a peace offering.
I guess we should all thank Congress and The President for their efforts. Afterall, it seems their policies and efforts over the last two years have led us to find the ecomomy on the mend and Virginia with an “extra” 152 million to save(or spend if you follow Gov. McD’s idea).
Thank you Mr. President from your friends at BD!!!
Wally, I find it hard to beleive you can’t tell the difference between investing in infrastructure when the rates are low and someone spending money they don’t have on things they don’t need because they happen to be on sale.
Nothing the Governor has done has been outside the norm when it comes to fiscal issues. The only thing outside the norm is that he was able to get accomplished what he got accomplished without raising taxes – something no Democrat has been able to do in eight years.
Brian, you don’t know Wally. He’s run for office so many times on the NO platform, I stopped counting.
Unfortunately, the only NO Wally hasn’t supported is the NO the voters have given him over and over.
Brian S.
“Without raising taxes”? Now or later. The same Obamaistic approach is severely criticized by the author’s on this site, yet when a Republican pulls the same creative financing, it is a panacea. I think you have bought into the framing of the word “investing”. When you capitalize with leverage funds without an assured income that is not investing, that is speculation.
I was afraid of this. McDonnell has been good so far, but crediting McDonnell for the beginning of a recovery is every bit as laughable as William Bailey sarcastically crediting Obama. That was sarcasm right, William.
It is like crediting Mark Warner’s tax increase when in real life, the recovery then increased revenues and balanced the budgets before his stupid tax increase even started being collected.
Wally, I disagree with VBTA and the TLP on this. Normally I am against debt, but in this case, Hampton Roads and the transportation fund have been continually robbed. The area now stands to get some long overdue money. We can’t tax at this point, but signs are pointing to a recovery and increased revenue. Then you still have anticipated help talked about. Really not a horrible time to borrow given that we are in a transportation “crisis”. I support the governor’s move.
Still doesn’t earn him credit for anything beyond his control, mind you.
And Wally, my wife doesn’t need that fur coat on sale, but we do need roads – on sale or not.
“Not a terrible time to borrow?” Oh my Britt, how can we condone increasing debt service when the Commonwealth is already in arrears in required contributions and payments citing interest promised deferments. This is a financial nightmare that requires reconciliation in a teetering future. The supposed assurances of a future in energy, federal governmental contracts, and an expansion in a world market, at this juncture, are synonymous with crap table bets on the come line.
Moreover, as exhibited in the past, dedicated revenues to “solve” our transportation woes with deep pockets will invariable result in political influenced expansion with less emphasis on repair and maintenance. maintenance.
Yes, it is absolutely amazing how the so called fiscal conservatives have abandoned their principles to get aboard the borrowing craze. Fact is, this is pure speculative borrowing without an identified secure source of revenue to pay the debt service. McDonnell and his team are magical at spinning a story, but in essence, debt is what this comes down to. Yes, we are all desperate for investment in transportation infrastructure to support jobs and economic growth, but borrowing now, and counting on a future Governor/Legislature to raise taxes/fees for debt service, is not responsible.
Mike, you’re a broken record and you’re wrong.
Sorry Brian, you saying so does not make it so. This sets up the same scenario as Gilmore did with FRANs. As a result of his gamble, taxes needed to be raised by his successor. In this case, the bet on future revenue from the Feds is not a safe bet as the republicans in the House of Representatives have already said cuts in domestic spending are absolutely necessary. Do you disagree with them too?
Mike, I have to agree with you on this point. As you know, I am a laissez-faire private investor who extensively studies market trends. Regardless of the private bond rating agencies, the timeliness of this gamble without needed risk-assessment alternatives is solely based upon deferring the highly possible consequences to another administration. Unfortunately, the spin rationalizing these actions is not ideology based, but on party loyalty. Moreover, I don’t believe could you locate a solid-minded economist that would condone the Governor’s route.
Yes Wally, that’s true. Regretfully, business groups around the state who should know better jumped aboard before they realized how it was to be funded (or actually, not funded), and now they can’t take back their endorsement. This is partially a measure of how desperate businesses are for improved transportation infrastructure, but putting the Commonwealth at risk fiscally is not the answer. If you have an initiative, pay for it, or don’t propose it.
Again, Mike Barret puts up a lie that can easily be disproven by Virginia Pilot Archives. After Gilmore, the budget was balanced under Warner and even in surplus BEFORE those taxes he touts as rescuing, were even started to be collected.
Barrett’s argument against borrowing given our transportation “crisis”, I disagree with, but respect. Same with Wally. Funny to find them in agreement. We NEED money for transportation in this area. But again, their logic is understandable and position respectable.
The local economy is showing trends of recovery. Specifically 152 million REAL REASONS to think new revenue is coming that can be used to pay off the borrowing or put toward VRS. That doesn’t even include anticipated money that may or may not appear, but that is still a possibility as well. Put that together and you have a direction that is less than ideal, but in no way blind speculation and wishful thinking. Betting against a team where the star Qb and wr were unable to play isn’t a lock, but less than a real gamble.
Wally made a good point of concern as to where that money will be distributed in our area. Maybe I am too focused on the fact that Hampton Roads will actually get state money for once. Ending the rip off of this region and the transportation fund is darn attractive. I usually agree with the VBTA and TLP guys. In this case I see potential in McDonnell’s chosen course.
So Mike? How does it feel to be on the same side of the argument with Wally, John Moss, and Robert Dean? When can we expect to see you at a VBTA breakfast?
Britt, I guess you would assert that the rating agencies simply misled the Governor and the Legislature in demanding that to keep our rating, the revenue situation had to be addressed. Frankly, I believe them.
I probably want improvements to transportation infrastructure as much as anyone, but issuing unfunded obligations is not the way to proceed. I fear this gives much too much power to the Governor to proceed with PPVs that could have a disastrous effect on our economy. Further, I guess I believe House Republicans more than you do; that is, I believe they mean to cut federal spending dramatically, and road funds will be in that mix, leaving us holding the bag.
Lastly, we have already cut the General Fund back to 2006 levels, and the only way to keep paying the new bonded debt will be to take more from schools and public safety. That is a bad idea, one which I do not support.
Mike, I don’t claim they misled anyone. I just say they were wrong. Warner was the one being deceptive. Predictions of balance based on increased revenue were being made as early as that spring, but Warner continued with the “chicken little” act to pass the tax increase and attempt to credit that increase for the budget repair. Unfortunately for him, the timing was off and we were back in surplus that summer. Proof was in the pudding.
I won’t say Warner never did anything right. I just say he broke his promise on taxes and gave us one even after realizing we didn’t need one.
As to the rest of your arguement on borrowing for transportation, I have to respect you view. I think we will make it just fine based on trends I am seeing. Your logic is sound and I totally understand the call for caution. In most cases I would be right there with you and the VBTA. I’m going with what I see and my gut. I also totally understand any criticism of using that as a criteria. On that front, all I can really say is I think it can be done.
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