Political Blogs: Sunday, Feb. 14
Featured: Jim McKelvey, Bill Bolling, Creigh Deeds
Jim McKelvey: Senate Bill 481
Once again politicians at every level of government do not get it. State Sen. Robert Hurt introduced SB 481; this bill essentially lowers the number of new employees a business must hire to be eligible for a tax credit. We need to stop writing new bills to solve private-sector problems. Instead we need to remove bills that weigh down business.
As a businessman I am not interested in another bill to give tax credits for hiring employees. People in the private sector are hired based on free-market demands, not on tax credits. As a small-business owner, try this on for size: cut taxes, drastically reduce the size of government, slash government spending and get rid of the over-burdensome regulation placed on business.
This bill and others like it are produced by government bureaucracies bent on writing new bills to justify their own existence. I have a tremendous respect for the new McDonnell administration and wish them all the best, not only for them, but also for the citizens of our great Commonwealth. But please, bring accountability and common sense back to our government.
Simplify, simplify, simplify!
Bill Bolling: Balancing the budget will require difficult choices, but it must be done
The biggest challenge facing the General Assembly during this year’s legislative session is the adoption of a new state budget for the 2010-2012 biennium.
In December, outgoing Gov. Tim Kaine introduced a budget that sought to close a projected $4B shortfall through a combination of $2B in budget cuts and $2B in tax increases. However, it is apparent that Gov. Kaine’s tax increase proposals will not survive legislative scrutiny.
During his first speech to the General Assembly, Gov. Bob McDonnell made clear that he will not support a budget that includes higher taxes. We simply do not believe that it is appropriate to raise taxes on families and businesses in the midst of the worst recession in 60 years.
Likewise, the General Assembly does not appear to be prepared to support high taxes. In the House of Delegates, Gov. Kaine’s tax-increase proposals have already been rejected by a vote of 97-0; and even in the State Senate, where Democrats hold a 22-18 advantage; it does not appear as though they can produce enough votes to support higher taxes.
Given the lack of support for higher taxes, it is apparent that the only way to balance the budget is through additional spending reductions. While reducing government spending is not easy, it is sometimes necessary.
Many of the Commonwealth’s current financial troubles are the result of bad decisions we have made in the past. To put it simply, we have been spending money we didn’t have to make promises we couldn’t keep.
We sought to pay for these promises through overly optimistic revenue projections, raids on the rainy day fund, spiraling amounts of state debt and federal bailout dollars. While these types of budget gimmicks can work for a while, sooner or later the underlying structural imbalances in the budget must be corrected.
In addition, because of the national recession state tax collections have declined significantly. Tax collections declined by 9.2 percent last year, and tax collections are projected to decline by an additional 3-4 percent this year.
During tough economic times, families and businesses have to prioritize their spending decisions and make certain they are not spending more money that they are taking in. Government must do the same.
Unfortunately, some seem to think that government should be immune from these fiscal realities, but it is not. When revenues decline, so must spending. It really is that simple.
While reducing state spending by an additional $2B will not be easy, it is important for us to keep these spending reductions in perspective.
Based on current projections, during the upcoming biennium state revenues (General Fund) will be $14.5B in 2010-2011 and $15.2B in 2001-2012. The last time state revenues were at this level was in 2006, when total state spending was $14.7B. So, in order to balance the budget through spending reductions we will have to return spending to where it was in 2006.
In order to achieve this goal, spending in the first year of the upcoming biennium will have to be reduced by an additional .7 percent, and spending in the second year of the budget will have to be reduced by an additional 5.8 percent.
While I don’t want to minimize the significance of these spending reductions, these are clearly achievable goals and the reductions must be made. There is no other alternative.
The Senate and House of Delegates are scheduled to release their respective budget recommendations in the next two weeks. We look forward to seeing their recommendations and working with them to reach an agreement that can receive broad bipartisan support.
Creigh Deeds: Session newsletter
Crossover of the 2010 General Assembly session is just a couple of days away, and many difficult issues are still under consideration. The House and the Senate must complete work on bills that originated in each respective house by Tuesday, Feb. 16. From that point forward, each legislative body may only consider bills that were passed by the other chamber. In other words, beginning Wednesday the Senate will only consider House bills.
Every day I receive hundreds of e-mails and letters about legislation. Many of those messages pertain to bills pitting dentists against insurance companies, mandating coverage for children with autism, and dealing with guns. The Senate has already passed or killed bills relating to those issues. The autism mandate bill is due for consideration Monday. Transportation is becoming an even more pressing issue because the Virginia Department of Transportation has already outspent its snow removal budget, which creates more pressure on limited highway maintenance dollars. With record amounts of snowfall around Virginia, we are reminded of our responsibility to maintain a vibrant transportation system.
Nonetheless, the issue which continues to overwhelm the work this session is the budget. Unfortunately, we do not appear to be any closer to coming up with a compromise. Various legislators, committees and caucuses have put forward multiple proposals, but all must deal with the stark reality that we will cut billions of dollars out of state services this year and thousands of state workers could lose their jobs.
Many of the proposals include revisions to one controversial component of the governor’s introduced budget – the delay of the implementation of updated local composite index (LCI) numbers. The LCI is the funding formula that computes state aid to localities for public education.
The governor’s proposal ultimately reduced funding for certain Northern Virginia jurisdictions where property values are high. The adjustment would have reflected the significant decline in property values between 2005 and 2007. The precipitous drop in the housing market yielded more state funding for Northern Virginia and some other localities, including Alleghany, Bath, and Covington. The new governor has already said he opposes the delay and, therefore, will shift millions of dollars to Northern Virginia, further reducing state funding for education in 97 other jurisdictions throughout the Commonwealth. For example, the policy change would shift over $5 million in state aid for education away from Albemarle County. Because of the differential impact on localities, even within my own district, the issue has caused a great deal of consternation and discord among legislators.
Amidst the heated debates, my colleagues and I on the Senate Privileges and Elections Committee found common ground and passed my bill on non-partisan redistricting this week on a unanimous vote. I am convinced we can do a better job of drawing district lines so people are fairly represented in the General Assembly and in the United States Congress. For a number of years I have submitted legislation to create a non-partisan redistricting commission to draw district lines every ten years. This session John Miller, a member of the state Senate from Newport News and Jill Vogel, the Senator from Fauquier, introduced similar bills. The Committee incorporated their bills into my bill, which will be voted on by the full Senate in the next few days.