The 2011 session is rapidly winding down with adjournment scheduled on the 26th of February. The last few days of the session will be spent working out differences between House and Senate versions of bills. Major differences remain on some critical matters.
The largest responsibility of the legislature each session is to pass a balanced budget. In recent years, as Virginia’s economy has struggled in recession, getting a budget passed has been more difficult. Growth in state revenues had been virtually non-existent, and we have seen the general fund, the money used for public education, public health and education, retract now to 2005 or 2006 levels. This year we have seen some growth, and that is a positive sign.
The primary differences between the House and Senate budget proposals revolve around how to spend the increase. The House opted to put the bulk of new revenue in transportation. The Senate chose to restore some of the difficult cuts we made in recent years to public education and health care. Reconciliation of the budget differences will be the main work over the next week. Among those differences are funding for public broadcasting, Medicaid, public education, and compensation.
Included in the budget is the General Assembly’s response to the long-term problem we have with the solvency of the Virginia Retirement System (VRS). There should be no alarm. VRS is sound, but a Joint Legislative and Audit Review Commission (JLARC) study showed in December that within the next fifteen years or so Virginia has significant unfunded liabilities. Last year, on the recommendation of the Governor, the General Assembly reduced contributions to VRS by $620 million. This year, the Senate and the House both made a concerted effort to begin repaying that money to VRS.
In December, the Governor made news when he indicated that for the first time in 28 years state employees would be required to contribute to the retirement fund. His plan, which called for a five percent contribution to be offset by three percent pay increases, has been rejected by both the House and Senate. Still, there are differences in the approaches taken by both bodies.
I have spent a lot of time over the past number of years in my newsletters talking about transportation. We don’t need to rehash all of the details of what is frankly a crisis that affects our long-term economic health. A transportation bill has worked its way through both the House and the Senate and, while there are differences, I am confident that a bill will pass. I have not felt like I could support either version of the bill for any number of reasons. First, the bill relies on four billion dollars in debt and breaks Virginia’s long-standing tradition of being a “pay as you go” state. Second, maxing out our debt capacity will tie the hands of future governors and legislatures and limits flexibility to address future needs. Third, the general fund will likely be raided in the future just to service the debt. In fact, the House plan takes $150 million out of the GF immediately.
This approach to transportation represents a short-term view. We have about $20 billion in back-logged projects that exist statewide. We have a shortage of maintenance funds that threaten our ability to maintain our current transportation infrastructure. Rather than tackle the problem head on, we are passing a $4 billion debt package. As I pointed out before, the money will be spent by 2016, but we will not complete repayment until 2039. Only three projects, two in Hampton Roads and one in Northern Virginia, are guaranteed to be completed with the borrowed money. A list of over 900 projects has been shopped around, raising hope that much needed projects will advance as well, but there is no guarantee that will occur. What I see is that by 2016 when the money is spent, we will be left holding the bill and we will still have a crisis in transportation.
A major accomplishment of this legislative session has been the passage of a bill requiring insurance companies to provide coverage for children with autism. Unless autism affects your family or you know someone who is affected, it is difficult to understand the pressure this disease places on people. The overwhelming body of evidence suggests the earlier you start providing therapy to a child with autism the more likely the child is to lead a productive life. The bill passed in Virginia is the most restrictive in the country, yet to many families it offers real hope. I think this is a significant accomplishment and congratulate Senator Janet Howell, a Fairfax Democrat, and Delegate Tag Greason, a Loudon Republican, for their leadership on this issue.
Creigh Deeds is a member of the Virginia Senate.
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