With all the fireworks that have gone off so far in the General Assembly session, one could be forgiven for missing the biggest task confronting the worthies: putting together the state’s two-year budget. Each chamber has released its own version, which means (barring a boycott from Senate Democrats), the whole exercise will end up being decided by a select group of members, who will drop their final product on members’ desks minutes before the vote is called.
Over the weekend, the Governor issued a press release in which he “…applaud[ed] the members of the House and Senate money committees for their support of our major budget priorities for the Commonwealth.” No word on whether that applause was thunderous or merely polite. Let’s just say that McDonnell is more concerned with the amendments the House and Senate have added to his draft:
The amendments put forth by both committees are detailed and numerous. They will require a very thorough review prior to our making any further, and more specific, comments about them. However, it is a very positive sign that there is broad agreement among our administration, the House and the Senate as to what the major priorities are in this budget, even if the funding levels differ somewhat at this point.
The different spending levels are going to be bones of contention. Legislators have been on a (forced) cutting spree the past few years and the pent-up demand to write bigger checks is likely enormous. That’s doubly so because this will be the first year in many that grants to non-state agencies will be off limits (owning to an opinion in early 2011 from the Attorney General’s office that such goodies violated the state constitution).
To help discover where the differences are, Sen. Mark Obenshain has created an unofficial “cheat sheet” showing where the House and Senate’s numbers clash, and how each set of figures differs from those set out by the Governor.
Bored yet? Hold, on there’s more…
My own Senator, Finance committee chairman Walter Stosch, has issued a guide to the Senate’s budget that has some interesting figures on revenue. Yes, the Senate intends to spend more, and here’s where they are getting the dough:
Reverses the proposed $110.7 million sales tax diversion to transportation in order to fund education and health and human resources priorities.
* Includes $68.4 million from the National Mortgage Servicing
Settlement:
– $61.8 million set aside in Non-recurring Reserve Fund.
– Appropriates $6.6 million for one-time capital project planning.* Reflects $33.5 million in projected revenue from the impact of
SB 597, sales tax from businesses with a presence in Virginia.
So the ink is barely dry on the shambling, taxpayer-funded mess that is the national mortgage settlement and the Senate is already spending the cash. Well, not all of it, as the bulk of the money will be stuffed into the state’s mattress for the (inevitable) rainy day.
They are also counting on spending the money they hope to raise by taxing online sales — yet another windfall, for the state, from the Amazon economic development deal.
But it’s the first item that deserves a bit of explanation. Gov. McDonnell wanted, over time, to increase the amount of sales tax revenue diverted to transportation. As Jim Bacon and I discussed, this represented a further shift away from the classic user fee model and toward wealth transfers. The Senate balked at that and instead, plumped for a gas tax increase indexed to inflation (which is a simple way for them never to have to vote on such a hike again). Sen. Mark Obenshain said this move was the equivalent of the Finance committee hijacking the Governor’s transportation plan. Perhaps. Either way, it also would seem to violate one of the principles McDonnell set out for his budget:
I proposed that we not raise taxes, and instead that we prioritize existing state dollars to focus on the core functions of government most closely linked to job creation and economic recovery.
Not quite. But this is merely the opening act of what could be a very interesting play. As mentioned above, Senate Democrats are still smarting over their loss of gavels and prime committee seating. Unless they get something — either more power in the upper house or more money for their budget priorities — they may refuse to play at all. The latter is more likely.
Already, at least one possible deal is in the works between Democratic Sen. Louise Lucas and the McDonnell administration:
Don Comer with the Portsmouth Partnership tells 13News that State Senator Louise Lucas is in the midst of a deal with Governor Bob McDonnell that would lower the tolls, in exchange for a vote on the proposed state budget.
Expect more such deals, agreements and understandings to be reached in the days ahead.
