Lief's Law

Joshua N. Lief


Simplify the Budget


An obscure budget process clouds policy decisions in the Commonwealth.


The defeat of the regional tax referenda Nov. 5 has been analyzed over and over again. At the risk of adding one voice too many, I offer my own perspective: Voters rejected tax increases based on the conviction that the so-called budget crisis in Virginia is caused not by a shortage of revenue but by an excess in spending.


To grasp the origins of the spending crisis, one must understand the workings of the state budget, the single most important piece of legislation that comes out of each session of the General Assembly. Unlike typical legislation, which focuses on one specific subject, the budget expresses the legislative and executive will on countless policy areas. Money equals policy, as demonstrated both in the affirmative, when money is appropriated for a particular area, and in the negative, when funding for programs is cancelled or curtailed. One need only look at each session’s member amendments (amendments to the budget sought by individual members of the General Assembly) to see the huge number of policy decisions that are reflected in final approved budget.


Despite the budget’s immense importance, the process of adopting and modifying it is so complex that there may be 500 people – and that’s probably an overestimate – who really understand it. Two years ago, as deputy secretary of commerce and trade, I would have numbered among them, at least in my Secretarial area. Today, after 10 months out of state government, I wouldn’t make the list. The true experts on the process are found in the General Assembly’s money committee staff and in the administration’s Department of Planning and Budget. Even in those agencies, the budget is so complex that most people specialize in one or two secretarial areas.  


The budget has developed into a very complicated document. In 508 pages of fine print, the 2002 Appropriation Act (the official name of the 2002-04 biennial budget) appropriated more than $52 billion. By way of comparison and as evidence of the huge growth in spending, the 1998-2000 biennial budget appropriated over $40 billion -- $12 billion less than just 4 years later.


To catalogue the programs funded by the budget would be to list the entire spectrum of activity in the Commonwealth. In addition to funding the better known state and local government activities, the budget supports a wide range of non-state agencies (broadly defined as any private and public entities that receive state funds). Opening pages at random will locate funding for obscure programs like the Sewage Appeals Review Board, Indoor Plumbing Program, School Resource Officer Incentive Grants Fund, Individual Student Alternative Education Program and hundreds more.


Besides spending money, the budget contains hundreds of detailed directives on how state government should operate. Simply put, the budget is the document where the legislative branch micro-manages the activities of state and local government. As an example, when I was in office and working on an economic development deal, the Commonwealth sold land to a prospect at a discount as part of an incentive package. The prospect ended up locating in Virginia and creating hundreds of jobs. However, what seemed to us a creative way to attract industry did not sit well with certain folks, which led to §4-5.13(b) of the Appropriation Act mandating that state land could be discounted only if offset by funds coming from the Governor’s Opportunity Fund. This is just one of hundreds, if not thousands, of ways that the legislature manages the executive branch in the budget.  


The budget’s complexity makes it difficult for the public to appraise the need for the cuts that have been ordered by the Warner administration. To understand what’s happening, you start by comparing side-by-side the 508 page Appropriation Act with a 317-page report on the budget reduction plans. Few people have the time or knowledge to perform this analysis. This opacity of this process is disturbing because the Warner administration’s budget reductions, like the General Assembly’s original formulation of the budget, makes policy on thousands of issues.


I don’t claim to have all the answers, and it is easy to “Monday morning quarterback” the work that has been done on the budget.  However, the process needs to be simplified so it can be better understood. This is particularly true in the Commonwealth today when the governor exercises his prerogative to cut state spending by 15 percent, the maximum allowed by law, outside the normal, open deliberative process. When the governor unveils his budget amendments in December, even deeper cuts are expected. Each cut is an expression of policy and should be debated and understood prior to its enactment.


-- November 18, 2002










Joshua N. Lief is an attorney at Sands Anderson Marks & Miller in Richmond who specializes in Business and Government Affairs. He is a former Deputy and Secretary of Commerce and Trade during the Gilmore Administration. He can be reached by e-mail at