Is it 2007? Or 2003?

Story by Chris Graham

We’re facing a budget shortfall, and it’s only going to get worse.
The Democratic governor is telling us so – and in short order, he’s going to tell us that we need to raise taxes to meet our core needs.
The year is 2003 – or is it 2007?
“When you talk about a budget shortfall, it’s important to remember that we’re not talking about reducing spending. We’re not going to reduce spending one penny in Virginia,” 26th District Republican Sen. Mark Obenshain said in an interview this week on “The Augusta Free Press Show.”

“What we’re talking about is the budget is not growing as much as we would like it to grow – so what we’re talking about is reducing the rate by which Virginia’s government grows,” Obenshain said.

Obenshain is not alone in offering criticism of the word from Gov. Tim Kaine that Virginia’s state-government finances are tighter than the administration had projected they would be several months ago. Republicans across the Commonwealth are wondering aloud whether Kaine’s acknowledgement of the fiscal issue earlier this week in a speech to members of the money committees in the Virginia General Assembly was just the beginning of a drumbeat toward a replay of the 2004 pitched tax battle.

“Last year, Virginia taxpayers were stuck with a $137 million tax surprise when then-Gov. Warner’s office misled the General Assembly about an accounting error. Today, Democratic Gov. Tim Kaine irresponsibly follows in the footsteps of his predecessor by cloaking a $295 million ‘forecasting error’,” Republican Party of Virginia spokesman Shaun Kenney said.The “forecasting error” was confirmed by Kaine – who said that his administration had revised its fiscal-year 2008 revenue forecast by $407 million based on an anticipation that the housing market will continue to slow.

The revised revenue forecast for ’08 comes on the heels of revenue collections for fiscal-year 2007 that were down $234 million from the governor’s earlier estimates.Kaine said he has ordered state agencies to curtail discretionary spending and to obtain Cabinet-level review and approval before hiring any new employees or initiating or renewing contracts for consultants or contract personnel.

He said he will also consider recommending a withdrawal from the state’s Rainy Day Fund – though he could face a hurdle there from the General Assembly.

“Prior to drawing down the state’s Rainy Day Fund, sound management practices would dictate that we thoroughly scrutinize the budget and make the necessary hard decisions on what should be funded and what should not,” House Appropriations Committee chairman Vince Callahan said.

“It is both premature and perhaps totally unnecessary to drawn down the state’s Rainy Day Fund, which is currently fully funded at $1.3 billion,” Callahan said. “The General Assembly has spent the last four year replenishing this fund. We should adhere to the intent of the law and only use it to respond to a severe economic downturn, as opposed to proposing to backfill errors in the revenue forecast. In fact, if these forecasting errors had not occurred, the triggers required by the state’s Constitution would not be met.”

Obenshain has a more philosophical objection to raise.

“One thing that I found curious, and frankly disconcerting, about the announcement earlier this week is that on the one hand, the executive branch is talking about austerity measures that will have to be taken in order to adjust to the slowdown in the growth of Virginia’s budget, but on the other hand, they’re talking about creating a statewide pre-K program that will cost literally hundreds of millions,” Obenshain said.

“It’s hard for me to reconcile the austerity measures that are being recommended on the one hand – cutting the rate of growth of K-12 spending and higher-ed spending and human-services spending – and then on the other hand creating new programs, when we’re having trouble funding the programs that already exist,” Obenshain said.

 

 

“We’ve gone through a period of really fantastic economic growth the past four or five years, and it has spoiled us here in Virginia. We have experienced unprecedented budget growth – in the past two years, our budget has grown by 20 percent. Twenty percent over the last two years – that’s phenomenal. Any business or family would give its eye teeth for that kind of growth in our household or business revenue,” Obenshain said.
“Unfortunately, that’s not been enough for the Commonwealth of Virginia. There’s just a dynamic that exists in government that the more you have, the more you need. The demands for growth in our budget are seemingly limited only by the creativity of many of the agencies that are receiving the state’s dollars,” Obenshain said.

  

Chris Graham is the executive editor of The Augusta Free Press.



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