Capitol Quagmire

In this space nearly a year ago ("Capitol Myopia," July 29, 2003), I lamented the inability of Virginia's political leaders to devise long-term solutions for areas of major concern, including education, transportation, health care, and the state’s structural budget imbalance. With the 2003 session of the General Assembly, it's clear that nothing has changed.

No elected official from either party – from the governor down - put forth a comprehensive strategy and plan of action to address these pressing priorities. The politicians blame their failure to offer meaningful solutions to tough problems on a variety of factors including legislative elections this November, the defeat of regional transportation referenda last fall and the continuing state budget deficit.

While business leaders appreciate political realities, the fact remains that current legislative efforts are insufficient to address core missions of government. Business location, expansion and retention depend heavily on our transportation, education and health care systems. Companies need fluid highways, rail systems, and airports to conduct business in an efficient manner. Business needs well-qualified, highly trained workers graduating from both our K-12 and higher education systems.

There have been notable achievements in these areas in recent years, particularly in the area of education. The 2002 higher education bond initiative gave a needed boost to our colleges and universities. Plans for workforce training and continued emphasis on accountability through the Standards of Learning are also important initiatives. However, Virginia can and must do better. Government has not fully funded the Standards of Quality, teacher salaries lag national averages, and higher education is straining to meet the needs of our citizens and businesses.

Transportation issues are clearly complicated by the failure last November of the two sales tax referenda. But defeat of two ballot initiatives is not justification for ignoring the problem. Transportation is a core governmental function. Virginia’s elected leaders must initiate proposals prior to next year’s General Assembly session to adequately address the state's transportation needs. We do want to single out Del. Jack Rollison, R-Woodbridge, and Sen. Kevin Miller, R-Harrisonburg, for at least having the courage to fight for meaningful transportation initiatives.

Inadequate Medicaid funding poses another long-term challenge for Virginia. For two years in a row, state budget shortfalls have resulted in Medicaid payments to healthcare providers way below national averages and often below the costs incurred to provide services. The cost of providing health care to Medicaid patients does not simply disappear when the Medicaid program is inadequately funded: It resurfaces in higher medical insurance premiums for private employers -- a hidden health care tax on businesses and their employees.

The mantra of “no new taxes” has created an environment in which no policy maker wants to directly raise revenues at the state level by conventional means. Instead, we have resorted to a series of backdoor maneuvers to accomplish the same goals by indirect means.

For example, the General Assembly raised “fees” this budget cycle by more than $275 million. Tuition is climbing by double digits annually at state institutions of higher learning. State government has forced cuts on local governments who have had to substantially increase property tax assessments in many areas to cover their budget shortfalls. Myriad one-time budget fixes have been used to make the numbers balance.

Anti-growth initiatives that threaten the state’s economy are advanced as a quick-fix approach to pressing long-term infrastructure needs.

On a positive note, Virginia remains a good place to do business as measured by many traditional business issues such as tort reform, workers compensation, regulatory climate, and environmental issues. In most respects, the quality of day-to-day government administration is quite high. Legislators do an admirable job solving local problems, administrative agencies function with a high level of professionalism and competence, and lawmakers tend to reject anti-business bills that come before the General Assembly.

What Virginia sorely lacks is a long-term strategic vision for the state that will lead us boldly into the future. We have neither debated nor resolved the central question of what we want our state government to do for us over the next 20 years.

Do we aspire to have an education system that is middle of the pack or in the top 10 percent nationally?

Do we want a transportation system that intelligently addresses areas of major congestion, current and expected, or is today’s program adequate?

Do we want to continue shifting costs in the health care arena by squeezing Medicaid reimbursements and covering the losses with higher health insurance premiums?

These are critical questions. The time is now for both our Governor and legislative leaders to debate these questions and come up with a vision for the future that will steer Virginia to greatness.

Clayton Roberts is president of the Virginia Foundation for Research and Economic Education (FREE), an independent business association committed to protecting and strengthening Virginia’s prosperous business environment through the political process.