Guest Columnist

Patrick McSweeney



It's Time for a Real Budget Fix

 

The blame game won’t solve Virginia’s budget mess.  Neither will one-time budget cuts.  It’s time to deal with underlying causes.


Virginia Democrats are discovering what Republicans learned when they were a minority in the General Assembly: The political party that controls the General Assembly must have a governing plan but the minority party is tempted to avoid proposing one. It’s easier to react to, and find fault with, the policies of the majority.

 

When a minority party gives in to that temptation it can generally expect to remain a minority party.  Voters may share the minority party’s criticism of the party in power without believing that the minority should control the legislature. Unless its negative fault-finding is accompanied by a positive governing plan that is more attractive than the majority’s plan, voters aren’t likely to make a change.

 

The alternative plan for governing needn’t be detailed or concrete. There have been times when a minority party has persuaded the electorate to turn out the party in power on little more than an impressionistic platform. The key for any party hoping to be in control is to convince voters that it actually has an idea about how to govern.

 

At the moment, Virginia Democrats are all about fault-finding. If they have an idea or a positive policy proposal, it has been lost in the constant stream of attacks on Republican, particularly former GOP Governors George Allen and James Gilmore.

 

Assigning blame won’t get Virginia out of its current budget crisis. Some of the causes are longstanding.  The public intuitively understands that it is more productive to debate how to address these causes than to argue about which party can be blamed for introducing them. There is plenty of fault to go around.

 

Neither party has shown that it is willing to do what is obviously needed to prevent a recurrence of the present budget crisis. State government can’t continue doing what it’s done for decades. A dramatic break with the past is needed.

 

Having become accustomed to painful budget crises every decade on average, Virginians may not be satisfied with a patch job this time. Business as usual is unlikely to satisfy them.

 

Business as usual would be to slash agency budgets without fundamentally changing state government’s way of operating. Powerful political interests accumulate around government programs. Those interests resist change even when it becomes clear that the programs are wasteful or unnecessary. They reluctantly accept occasional cuts because they must in order to balance the state budget. This is why across-the-board cuts are politically popular. No interest group feels it suffers a disproportionate reduction. This response is just that — a response. It would be better to deal with the cause in an effort to prevent future budget crises.

 

The underlying cause of these budget peaks and valleys is not hard to identify. Elected officials authorize too much state spending when the economy is hot, eventually being forced to impose harsh cutbacks or raise taxes when the economy turns cold.

 

The business cycle hasn’t been repealed. The economy doesn’t proceed in an upward or downward direction indefinitely. Virginia’s principal problem is that governors and legislators haven’t exercised budget discipline when it most matters — when revenues are growing and an economic downturn isn’t foreseen.

 

One way to impose discipline is to restrict revenue projections to a long historic trend-line that prevents excessive spending when the economy is overheated.  Basing projections on short-term performance of the economy has never been wise.

 

When revenues are pouring in, elected officials can’t seem to resist the pressure to spend it all. Unless that changes, Virginians can expect more of this kind of budget crisis.

 

-- August 26, 2002

 

 

 

 

 

 

 

 

 

 

From 1974 to 1977, Patrick M. McSweeney was the executive director of the Virginia Commission on State Governmental Management. A former chairman of the state Republican party, he remains active in Republican party politics. He also is founder of McSweeney & Crump, P.C.