UPDATE: The House just rejected the Senate amendments. Time to go to conference.
House vote: 22 in favor to 66 against. Senate vote: 36-4.
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Earlier today I posted that the Senate was considering budget amendments that restored funding with federal stimulus dollars to programs that were cut to balance the budget when the deficit was $3.2B. However, the deficit grew to over $4B with the latest revenue projections.. If you use most of the federal money to increase spending on the previous budget, you aren’t actually bringing the budget into balance…you are increasing the deficit.
Because of this, Lt. Gov. Bill Bolling proves once again why he is not only a current great LG, but will continue to be a great one for the next four-plus years. He clearly articulates in this press release exactly why the State Senate budget proposal that passed today is reckless and ineffective:
“Needless to say, this has been a challenging budget year, with the Commonwealth facing a deficit of $3.7 billion. To address this shortfall we were facing significant spending reductions for most state programs. It appears as though the infusion of some $4.5 billion in federal stimulus funds will enable us to restore many of these budget cuts, at least in the short term.
“Given the significant infusion of funds provided by the federal stimulus package, I think the Senate did a good job crafting amendments to restore many of the budget cuts that had been made in the Executive Budget. However, I fear that this is a short term solution to a long term problem. By relying on one time federal funds to balance the budget we are not addressing the fundamental structural problem in the budget. Simply put, we are spending more money than we are taking in and we cannot continue to do that. Unless we see significant economic growth over the next 18 months, we will once again face massive budget shortfalls when the federal stimulus dollars expire.
“Going forward, our full attention must be directed toward effective proposals to get out economy moving again. We can do that by reducing taxes for families and businesses, eliminating unnecessary regulatory burdens, directing more resources to aggressively recruit new business and industry to Virginia and empowering the private sector to unleash the entrepreneurial spirit of America. That is what will ultimately get our economy moving again, not continual financial bail outs from Washington.”
Senate Republicans, however, feel quite differently about their efforts:
“Ten days ago, I was not in support of the budget proposed by the Senate Finance Committee,” Wampler said. “Since that time, the Senate Finance Committee made significant accommodations to the positions advocated by the Republican Caucus for the past month. I am grateful to Chairman Colgan and all the members of the Senate Finance Committee for coming together to address the issues we raised.”
Since the General Assembly session commenced, Senate Republicans have focused attention on the use of realistic revenue forecasts, integrity in budgeting, contingency spending, and limited use of one-time sources of revenue to balance the budget. These positions have been advocated by Senators in floor speeches, in Senate Finance Committee meetings, and in budget negotiations. The budget passed today showed significant concessions in each of these areas.
“When I asked to defer passage of a budget, I did so to give time to get more information on revenues and to ensure all forty of our members could have a say in how our budget reflects this new information,” Wampler said. “The budget we passed today proves the wisdom of that approach. This budget reflects the most up-to-date revenue forecasts and is the most fiscally-sound budget proposal we have seen this year.”
Among the amendments made to the Senate budget at the request of the Senate Republican Caucus were:
· Delayed action on the Senate budget until new revenue numbers indicating an additional $821 million shortfall and details of the federal stimulus package were available;
· Adjusted revenue numbers to reflect the souring national and state economies;
· Restoring the funding cut from the School Construction Fund;
· Reversing the actions of the Governor to raid the Lottery fund;
· Holding public safety harmless by reversing cuts in Sheriffs’ budgets; and
· Avoiding dependence on one-time revenue sources such as a proposed $56 million transfer from non-general funds at public universities to debt and avoiding the short-term loan that would be realized from the accelerated sales tax from retailers
“Last week, Senator Wampler and I presented to the chairmen of the Senate Finance subcommittees a list of concerns our Caucus had with the proposed budget,” Stosch explained. “We were gratified this week to see the majority party concede to each of our concerns. Their willingness to listen to and heed our concerns allowed us to pass a budget that is more fiscally sound with strong bipartisan support.
“The budget passed today represents a significant improvement over what the Governor proposed and what the Senate Finance Committee approved last week,” Stosch continued. “Yet it is still not perfect. There is still dependence on one-time federal revenue sources, and there is still significant restructuring in government that needs to be done. I voted in favor of this budget with gratitude for the changes made and with confidence that it represents the best effort we could offer in difficult times. While I respect the need of some members to oppose this budget, I feel that our budget is a significant step forward and will give us a strong position going into a committee of conference. We must continue to examine the 2010 budget in the coming months to reduce reliance on one-time federal funds contained in the general budget.”
“Last year, the Senate Republican Caucus voted unanimously against the Senate budget,” said Senator Thomas K. Norment, Jr. (R – James City), Senate Minority Leader. “Our caucus felt that the concerns we raised on the budget were ignored, and our votes reflected our discomfort with the budget. This session opened with fears of a repeat of last year and the budget advanced by the Senate Finance Committee exacerbated those fears. The willingness of Chairman Colgan and the members of the Senate Finance Committee to delay a vote on the budget and work cooperatively across the aisle to address our concerns led to the passage of today’s budget. We are grateful for their efforts. I hope the civility and cooperation that went into preparing this budget will continue to prevail in future budget negotiations.”
