|
|
Let's
Try Spending Reform Tax
hike zealots argue that the state has exhausted
budget-cutting opportunities. That's just plain
wrong. Virginia could save hundreds of millions of
dollars with little pain.
If
Gov. Mark R. Warner had spent just a fraction of the
time he devoted to raising taxes to looking for
spending cuts, he could have guaranteed there will
be no budget impasse at this session of the General
Assembly. All he had to do was keep his word.
He pledged in 2001 not to raise taxes. Then, in the
first year of his term, he said he would make
efficiency in state government the centerpiece of
his administration and announced that he could
reduce state spending by $1 billion a year by
implementing most of the recommendations of former
Gov. L Douglas Wilder's Commission on Efficiency and
Effectiveness.
Had Warner stayed that course, he could have
established himself as a true fiscal conservative.
Instead, he chose to be just another tax-and-spend
Democrat.
Big Business and its ally, Senate Finance Committee
Chairman John Chichester, R-Stafford, encouraged
Warner's policy shift. Ignoring clear evidence to
the contrary, they have contended for months that
opportunities to cut state spending have been
exhausted and that a massive tax hike is the only
responsible option left.
Unless the conclusion of the Wilder Commission that
annual spending can be cut by $1.3 billion is just
hot air, there is a lot more left to do on the
spending side. Warner obviously thought the
commission's recommendations were reasonable a year
ago when he made his claim that he could use them to
cut spending by $1 billion a year.
There are opportunities for substantial spending
cuts beyond those recommended by the Wilder
Commission. For example, the maintenance budget of
the Virginia Department of Transportation can be
reduced by hundreds of millions of dollars every
biennium just by expanding a successful 1990s pilot
program involving privatization of maintenance work.
A November 2000 report published by Virginia Tech
describes the pilot program and the savings
potential involved. For some reason, VDOT never
expanded this program.
Other states are taking advantage of this
privatization initiative. Through dramatic
reductions in overhead rates, efficiencies of 16
percent to 20 percent in highway maintenance can be
realized. Applied to a biennial maintenance budget
of almost $2 billion, VDOT can save as much as $400
million.
Savings of this magnitude would eliminate the need
for a $392 million tax hike, as Warner has proposed,
to fund new highway construction. The efficiencies
achieved in maintenance can free roughly the same
amount to be used for new highways.
Budgets of other state agencies, such as the
Department of Corrections, can be sharply reduced
through more efficient program administration.
Outsourcing of state government's information
technology services could yield enormous reductions
in total spending on that function.
What all this demonstrates is that Warner and other
tax hike proponents have their priorities skewed.
Their first obligation is to assure that the tax
revenues already being collected are being spent
wisely and in the most cost-effective manner
possible. That obligation has not been met.
Warner has set up a series of false choices for the
General Assembly. It is not a question of accepting
his massive tax increase or cutting vital services.
If better management and carefully designed
outsourcing of key functions were pursued, the
reduction in overall state spending would far exceed
the $1 billion in new taxes Warner has requested.
What we know for certain is that Warner hasn't been
interested in exploring opportunities to cut
spending. For the past year, he has been in
single-minded pursuit of a tax increase.
--
February 2, 2003
|
|
