JLARC Report Shows Republican General Assembly Making Strong Progress

capitolThe Joint Legislative Audit and Review Committee (JLARC) highlighted Virginia’s decrease in general fund spending vs. the increase in Medicaid spending in a report issued today.  Key findings?

  • General fund spending has decreased by 5% over 10 years when adjusted for population and inflation
  • When only adjusted for inflation, the general fund grew by 3% over the last 10 years
  • Non general-fund spending is growing 49% faster than general fund spending
  • Spending growth declined for 15 state agencies
  • Spending grew at less than the rate of inflation for 23 state agencies
  • Medicaid is the fastest growing part of the general fund budget
  • General fund spending on Medicaid grew by 79% in 10 years, or $1.7 billion
  • Total appropriations for Medicaid grew by 75% in 10 years, or $3.7 billion
  • Medicaid accounted for 54% of all general fund spending growth in the last 10 years

Good news for fiscal conservatives looking to shrink the size and scope of Virginia government, despite several massive tax increases being inflicted on the taxpayer wallet over the last decade.

Still, between the serious structural reforms being implemented by Speaker Howell, combined with the unsung heroism of pension reform in Virginia (seriously — someone really ought to do a story on how Howell has helped reform the Virginia Retirement System and how many billions of dollars taxpayers have been saved) and the increasing pressures on local governments and Medicaid spending, this is not a bad way to catch grenades.

Next on the agenda: throwing them back over the wall.  Check out the JLARC report for the full details.

UPDATE:  Some interesting tidbits here.  Direct aid to localities for education has seen a $2 billion increase over the last 10 years — consuming 15% of the general fund.  If education reform is on the top of McAuliffe’s priorities, one would be hard pressed to demand a further commitment from Virginia taxpayers… unless, of course, the reforms are structural and procedural rather than involving throwing money at the problem.

What is most interesting in this equation is the amount given to Virginia’s colleges and universities.  UVA is at $2.5 billion, VT stands at $1.2 billion, VCU at just shy of $1.1 billion.  Those three schools alone consume 11% of total appropriations, and all three have seen a 50% increase in spending over the last 10 years.

Public education?  A paltry 21% of total appropriations — just barely outpacing inflation.

The chart of doom?  Table 11:

101315_JLARC_table11

Medicaid alone stands at 74% total growth over a 10 year period.  Higher ed has skyrocketed.  As for state aid to localities and public education spending — the real crux of the problem, IMO — this has a rather absurd effect of disguising a series of mandates imposed upon localities, some funded, others partially, and many not funded at all (thank you, Dillon Rule).

The full report is worth a read, and it is very important to make sure one distinguishes between total appropriations and the general fund.  The general fund, we have a great deal of control over.  The rest of the budget is pretty much baked in… and there’s not much to repair on this.

Still, if one begins to reflect on the items driving the budget pressures today — Medicaid and higher ed — while ignoring certain effectives such as transportation, infrastructure, public education, and public safety (another category that just barely outpaced inflation) one can easily see where Virginia’s priorities ought to be shifted.  A reckless focus on Medicaid expansion, or worse still, shoveling more money into the maw of higher education while the Virginia Community College System (VCCS) is doing far better with far fewer resources?

The brass ring is still in a reform of public education in Virginia — a structural, comprehensive rethink that forces Richmond to live up to its constitutional duties while giving high school graduates the best opportunity to succeed without encumbering six-figure debt.

Virginia might have been founded on indentured servitude… but let’s not stay there, folks.

 

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