Huge Opportunities for Our Incoming Governor
By Mike Thompson • Dec 2nd, 2009 • Category: Feature, State GovernmentGovernor Kaine is drafting his last budget message and readying his final two year proposed budget for public view before Christmas. The incoming McDonnell Administration will have that document to work with for about a month before taking control of the state reins. That isn’t a lot of time, but here are some thoughts.
First, Governor Kaine’s proposal will give McDonnell something to either hide behind or re-craft depending on how aggressive he and his team want to be in their first year. Our state’s one-term limitation on governors almost requires big changes to be part of the first year in office, and McDonnell has that kind of capital given the resounding victory they enjoyed this fall.
Second, the upcoming two-year budget will require substantial reductions in current spending. The easiest action will be to hack away at state government with across-the-board reductions rather than taking a look at core functions of government and eliminating those things that are ‘nice-to-haves’ but not “core functions.” Reducing and eliminating lower priority programs will better protect core services so that, in turn, they can be better operated.
Third, there are a number of experts in Virginia and around the country who have worked at re-tooling state and local governments who could greatly benefit the McDonnell Team. One such expert is Bill Eggers at Deloitte who has written a number of books and articles on bringing government into the 21st century. The Reason Foundation’s Len Gilroy has worked with state governments across the country including California, Florida, Texas, Louisiana and others. There are former Delegates Jack Rust, Alan Louderback and Chris Saxman. Maurice McTieg of the Mercatus Center at George Mason University is a walking factory of ideas. Bill Leighty, the former Chief of Staff to Governor Mark Warner and to Tim Kaine for two years, can be a huge benefit to a dedicated effort to reduce government while maintaining core functions. And, of course, the Thomas Jefferson Institute has made a name for itself by proposing creative alternatives to current government programs and policies.
Bob McDonnell has a huge reservoir of good will and scores of experts who will be happy to help out in crafting a trimmed down state government where core functions are the priority.
There are those who call for new taxes rather than reducing government programs or totally eliminating those that government shouldn’t be involved in at all. Reducing government intrusion into our personal and business lives will have a positive impact on economic growth while tax increases will only hinder it.
These state reductions will include cuts to monies that flow back down to counties and cities, requiring local governments and school systems to seek efficiencies and possibly eliminate programs. It’s clear that many local governments grew much too quickly during the housing boom a few years back. They grew the base of government as if the revenue increases would never end. Of course, that was a reckless way to operate and now they must reduce spending and re-evaluate what is important and what is not.
The current recession is not likely to end quickly. A total “remake” of state and local government is required in face of this new reality. Government simply must cut back, evaluate its true core functions and take action to restrict the growth of government in the future.
It is clear from this year’s campaign for governor that Bob McDonnell agrees with this basic philosophy. The stars are aligned for him to take bold actions to redirect government and boost economic recovery. This is a huge and exciting opportunity for Bob McDonnell and the budget team he is gathering around him.
Mike Thompson is the chairman and president of the Thomas Jefferson Institute for Public Policy, Virginia’s premier non-partisan public policy foundation.
For 24 years Mr. Thompson owned his own marketing company in Springfield. During 11 of those years he was also president of a family owned group of furniture stores in Georgia. After selling his company he started the Thomas Jefferson Institute.
He has been very active in national, state and local politics and has been a member of a number of community organizations, commissions, and committees. He is the Past Chairman of the Virginia Leadership Council for the National Federation of Independent Business (NFIB) and serves as Vice Chairman of the internationally acclaimed Fund for American Studies.
These views are his and do not necessarily reflect those the Institute or its Board of Directors.
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[...] Huge Opportunities for our Incoming Governor (Mike Thompson/Bacon’s Rebellion) [...]
Mr. Thompson, I happen to think that my way of life is important to me. That includes investment in public transportation that will reduce the need for cars and new roads. South Eastern Virginia can no longer maintain the roads we have because of the no investment strategies laid out by our state legislature over the last twenty years. We need investment in our schools, many school buildings here mirror the sad state of our roads. While you may be excited over the incoming McDonnell administration, I see no change for the better on the horizon. Four more years of no new taxes and less government rhetoric. To me that translates to Virginia becoming more like a Banana Republic and when the forces that now prevail hold sway we will be more like Somalia than The Commonwealth we could have been.
Frances R: Good Grief. If you have been reading Bacon’s Rebellion you would remember that no one has talked about not investing in infrastructure. No one. It is how to do it, where to get the funds, and how to improve the ability -in the midst of a difficult recession – to grow our economy. Virginia continues to have one of the best states in the country in a number of areas: best place to live, best place to raise a family, among the best institutions of higher learning, some of the best K-12 public schools in the country, etc. So we won’t become a Banana Republic and that rhetoric simply does’t connect with the discussions in this bi-weekly e-zine. Mass transit will never replace the need for new roads and cars in VA nor in this country. Mass transit works in congested areas but not as a replacement for cars but as a supplement. And we look at rail more often that we should when Bus Rapid Transit is cheaper, more flexible, and carries more people. Ther $3 billion of transportation bonds approved and still sitting to be sold. There are tens of billions
Frances R: (let me continue since my computer hick-upped and sent my response before it was ready….).
There are $3 billion of transportation bonds approved and still sitting to be sold. That is infrastructure money sitting there to be used. There are billions more that can be available from private sources if the state is willing to enter into public private partnerships and if Congress would allow us to do it by making minor legislative changes: billions for school construction; billions for transportation construction. These are investment monies seeking safe places and government is a safe bet. If VA doesn’t use these funds, then these billions are likely to go somewhere else.
Government has core responsibilities and those responsibilities don’t always have to be funded through taxes. The best income producer for government is a strong and vibrant economy. Government’s role in this area is to provide the best possible environment for economic growth. This is not through larger government but through low taxes, less intrusion into the private sector, minimum but necessary regulation, and the active encouragement of economic growth.
Thanks for commenting on my article. You might want to read some of the articles in the Bacon’s Rebellion archives and you will find a slew of ideas on how government can provide services and build needed infrastructure without raising taxes and by running the bureaucracy in a more efficient and effective manner.
Mike Thompson
Thank You Mr. Thompson for answering my post. I have been reading Bacon’s Rebellion for about five years so am not unfamiliar with past articles on all things concerning Virginia. I have learned a lot. I live in Virginia Beach. I can tell you that our auto traffic is out of control. People here spend many more hours a week trying to get to and from work. We have bridges and tunnels that can no longer handle the demand plus they are in need of repair. Serious need. Our interstate roads are crumbling due to lack of maintenance since the tolls were removed. I am sticking to my conclusions from my orginal comment. Southeastern Virginia has been totally underserved by The Virginia Assembly be it boom or bust times. I am tired of reading about privatization schemes for everything that this state government should be doing for all of its taxpaying citizens. Seems to me if you privatize everything the users are paying fees to corporate coffers and services will be doled out after CEO compensation and stockholder satisfaction is met. In the end, localities have to keep raising property taxes to make those cities and towns work. This is all smoke and mirrors. If we want Virginia to have economic growth we as a population have to act like adults and contribute our fair shares to make it happen. There is no Santa Claus and no tooth fairy. Meantime, it would be nice to have elected officials grow a pair and tell the voters the truth.
Frances, I understand your frustration about traffic and congestion. I live in Northern Virginia so traffic nightmares are not something that is unfamiliar to me. How to handle it though is our disagreement. Our state needs billions of investments in congestion relief and maintenance funds. How to get those funds is key. Other states have turned over some of its infrastructure to the private sector — Chicago leased its toll road for $1 billion; Indiana leased its toll road for much more. Virginia could have done the same with the Dulles Toll Road (some estimates for as much as $2 to $5 billion) but we refused. Those funds were then used in Chicago and Indiana to improve transportation infrastructure. How public private partnerships are structured is key and that is a way to success. We can learn from others. There is a private sector idea/proposal floating around to “lease” the land under the port in your backyard for $850 million or more for 40-50 years and the state would lease it back at a cost less expensive than floating bonds. Those funds could be poured back into your area of the state and they would be there as soon as an agreement was signed. A similar proposal for $250 million has been discussed for opening up the rest stops on our interstates. We contract out interstate maintenance today because VA Tech analyzed the private maintenance on 250 miles (a test) and it was $20,000,000 less expensive than the state maintenance over four years. Yet, we have not even tested the idea on our primary and secondary roads. If similar savings could be found on our primary roads alone, that is a savings — using the private sector for maintenance — of $180 million a year. Florida contracts out more than 80% of its road maintenance and saves a chunk of money. Those savings could be used to pour back into additional maintenance. Selling the ABC stores might bring in $500 million or more ‘up front” and those funds could be used for transporation. There are $3 billion in transportation bonds sitting to be sold. That should be a no brainer. Bob McDonnell would like to charge tolls on our interstates as you infer is a good idea in your last comments above. There are companies interested in repairing bridges in much less time than the state can do it and get back paid back from federal bridge/transportation funds over the next 20-25 years and a large number of our worst bridges would be repaired in five years. So using private sector money is a good thing if done right. Our goals are the same. There just aren’t public monies to do it — our folks aren’t ready to pay more taxes into a state run transportation system. By the way, we are one of only a very few states that controls our roads from the state capital. The vast majority of states leaves local road construction and maintenance to the counties and cities. We should do that.
Thanks for your interest in making our transportation system better. Money and how it is prioritized is key. We should make the private sector part of an overall transportation plan.
There is a private sector idea/proposal floating around to “lease” the land under the port in your backyard for $850 million or more for 40-50 years and the state would lease it back at a cost less expensive than floating bonds. Those funds could be poured back into your area of the state and they would be there as soon as an agreement was signed.
Mr. Thompson, Thank you once again for commenting on my post. I have a daughter that lives less than a mile from the port that you mention. The only access that the trucks that haul the ports deliveries is driven down Hampton Boulevard. This is a residential area with a thirty five mile an hour speed limit. There are schools with interesections used by children that need to cross in a totally vehicle friendly atmostpehere. This route takes the trucks to the choice of two tunnels that can’t handle the automobile demand much less the trucking demand. The other alternative for the trucks is the interstate which requires extra miles and gas expenses for them. To get back to my point about being underserved here is that Virginia is happy to make the money our International terminal provides, but our politicians never deliver the money to Hampton Roads to make it easier for business or the citizens that are left to deal with their lack of accountability. You are lucky to live in Northern Virginia, the state has provided you with shovel ready or in progress transportation improvements that will continue to be funded until completion. Down here we get Nada, Nyet, Bupkus. Another thought, is that down here the best we can hope for is Light Rail, when High Speed Rail would bring higher Federal investment and a connection to points south through North Carolina. Let me assure you again, I have been paying attention. We have so far been represented by a Legislature that has abandoned South Eastern Virginina because of the Federal Dollars spent here by our military presence. They have been afforded that cover so that the business friendly, no new taxes mantra gets them elected. My frustration is that our Governor elect when campaigning in this area called himself Virginia Beach’s own. He did the same when campaigning in Northern Virginia. I’m sure he will continue to provide for Northern Virginia even if he outsources the states responsibilities to private entities as you wish. Down here we will just comfort ourselves with the same rhetoric of the last thirty years while paying for one more wheel alignment on our cars.