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Ken Plum: Balancing the state budget

Adjourning a 60-day legislative session without approving a biennial budget may seem like Washington-style failure to some, but to those who work closely with the process taking more time to balance the budget reflects the realities and limitations of the tremendous task involved.  Contrasted to federal budget-making, there are no continuing resolutions or the ability to print or borrow money.

Budget-making reform a couple of decades ago requires the Governor to present his budget in mid-December before the holidays; but with the General Assembly meeting in early January, the amount of time to balance the budget is less than three months for two very different legislative bodies and the governor to agree.  The state Constitution requires that the budget must be balanced.  The amount of money we are talking about is nearly $85 billion for a two-year spending plan.

Virginia as a state continues to grow in wealth; we are 7th wealthiest among the states. Our population is increasing (12th among the states), and we are becoming more diverse and older. Demands on state services increase with all these factors. Public school and college enrollments are increasing. Diversity and longer life spans present new challenges. At the same time the state works with a revenue system that is decades old.  Its income tax was last adjusted in 1974. Its sales tax has had minor adjustments but continues to be among the lowest in the nation. The Virginia highway system is second largest in the country and is funded with revenue plan that was last adjusted in a meaningful way in 1986. More federal mandates such as Medicaid put pressure on the state budget.

The General Assembly adjourned its regular session on March 10 and immediately went into a special session to complete the budget.  I believe the task will be finished in a couple of weeks. At least there will be a spending plan in which expenditures are met by available revenue. There is likely to be a big sigh of relief as the cranky old budget procedure has once again turned out a budget.  Amid the celebration must also be recognition of what the budget does not provide.

The elastic band of revenue will be stretched as far as possible, but it is not great enough to reach around all the needs. There will be a small increase in k-12 funding, but localities will still be required to pick up a disproportionate share of costs.  Higher education will get a bump in state revenue, but parents will still have to pay the higher tuition rates that have come with shrinking state revenue.  Our highway system with the worst congestion in the nation will not get new revenue unless some business wants to buy naming rights to a road or intersection.  The number of our most vulnerable citizens on waiting lists for services will not decline.

Many of the votes on the budget including mine will be cast on the basis that we have done about as well as we might with the money we have to spend.  That will not stop us from working in the future on a budget that is finished on time but also is more adequate to meet the needs.

Ken Plum is a member of the Virginia House of Delegates.

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