Building
the House Budget
Remarks
made on the floor of the Virginia House of
Delegates, February 6, 2004
Mr.
Speaker and Members of the House, in just over two
weeks the Appropriations Committee will adopt its
version of the Commonwealth’s budget for the
upcoming biennium.
With
the actions of the House Finance Committee this past
Wednesday, many of you are wondering how the
Appropriations Committee will be able to craft a
budget.
On
December 17th I announced that the
Appropriations Committee would build
a budget assuming that the Governor’s tax
package would not be approved.
To act otherwise would have been fiscally
irresponsible.
With
that as our first assumption, I, along with the
subcommittee chairmen, began to chart a course of
action whereby we would build a budget using the
official “baseline” general fund revenue
forecast of $26.1 billion.
The
“baseline” forecast represents an increase of
about $1.8 billion in additional general fund
revenues for the 2004-06 biennium.
As
we began to build our budget, we set forth several
objectives that would serve as our compass in
prioritizing spending.
From the start, our first objective has been
to preserve the state’s triple A bond rating.
This is absolutely essential to the economic
viability of Virginia.
The first step in doing so is to keep the
promise that I, along with the Governor and Senator
Chichester, made to Moody’s in that we would
replenish the “Rainy Day” fund.
Through
our actions we will restore the $128.5 million to
the Fund which had been slated for transfer to the
general fund in the current fiscal year.
Second, as required by the Constitution, we
will make a deposit of $87.0 million in fiscal year
2006. Together,
these actions will bring the balance in the Fund
from $128.0 million to approximately $350.0 million.
As
we build our budget and allocate over $1.8 billion
in new revenue we will be guided by the following
objectives:
1)
We
will fund the cost of re-benchmarking the current
Standards of Quality as proposed by Governor
Warner.
2)
We
will invest approximately $128 million in
additional general fund support for higher
education. These
dollars will be targeted towards enrollment growth
and to ensure more moderate tuition increases for
in-state undergraduate students.
We
will also provide funding for student financial
assistance, including tuition assistance for
undergraduate students enrolled in our private
colleges.
3)
We
will provide funding for our mental health system,
including full funding for the Olmstead
initiatives.
4)
We
will protect the health care “safety net” for
our children by providing funding to meet our
projected enrollment demands in the FAMIS program.
We will maintain our current eligibility
and benefits structure in our Medicaid program and
provide full funding for utilization and inflation
for our hospitals and nursing homes.
I
am sure that you all are wondering how we can build
our budget within the revenues available.
Clearly, the Committee’s flexibility to
deal with competing budget issues rests on our
ability to examine the budget and prioritize the
Commonwealth’s obligations.
In
order to fund our existing commitments, the House
budget will not provide funding for program
expansions or new initiatives.
We have a responsibility to meet our existing
needs in education and health care before we try to
assume new obligations.
Second,
to the degree possible, we will level fund or freeze
programs at the FY 2004 level, unless the funding
increase is necessary to meet enrollment and
caseload increases.
Third,
while transportation is vital to our long-term
prosperity, I do not believe that we can burden the
general fund with yet another obligation.
Therefore, our budget will not include the
transfer of the insurance premium tax.
These revenues currently flow into the
general fund and are used for education, public
safety and health care. The debate over
transportation funding should be centered around
user fees and not on diverting general funds.
It
is my hope that at the appropriate time this Session
we can discuss new funding for transportation in
order to build new roads and repair our bridges.
However, I want to make it perfectly clear
that any increase in fees for transportation will be
used only for transportation and will not be used to
balance the general fund budget.
Fourth,
our budget will identify programs whose time have
come – and are up!
For the last several years the Appropriations
Committee has recommended actions to eliminate
programs or to align state spending on programs
based on the direct benefit to the state.
We cannot continue to be everything for
everyone. Freeing
up these dollars will allow us to meet our
commitment to education and to serving our most
vulnerable citizens.
Finally,
our budget will include certain revenue enhancements
that have a nexus to the programs they serve, such
as health care and public safety.
These “user fees” will help support these
services, thus providing the needed flexibility
within existing general fund tax revenues to meet
our obligations in both public education and higher
education.
In
closing, I believe that the budget the
Appropriations Committee is building will address
our core commitments in a responsible manner that
maintains our fiscal integrity and does not rely on
one-time fixes to get us through the biennium.
By
working together in a cooperative fashion we will
leave here on March 13, 2004 with
a budget that addresses our core services which are
so important to our citizens – a budget that looks
to the future and maintains our triple A bond
rating.
Thank
you.
--
February 9, 2004
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