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Budget
Wars: Phase 2
With
tax revenues gushing -- even before tax hikes kick
in -- the pressure to cut state spending will
relent. The House of Delegates must keep the heat on
the Warner administration.
To
the chagrin of proponents of tax increases in
Virginia, the state budget for 2004-2006 had not
even been signed into law by Governor Mark Warner
when headlines blared the news that revenues were
coming in at 9.5 percent rather than the 6.7 percent
Warner forecast just a few months ago. Warner and
other tax proponents would be well advised to tone
down the celebrations over their perceived victory
in raising taxes at the recent special session.
Before
Warner leaves office in January, 2006, two
developments may have occurred. First, Virginia’s
economic growth may generate enough new tax revenues
to show that the massive tax hike just passed by the
General Assembly was unnecessary. Second, much
of the $1 billion in annual reductions in state
spending that Warner conceded could be realized
through eliminating waste and streamlining
government will be clearly identified, if not
already implemented.
A
number of opinion polls have been taken in recent
months. The level of public support for a tax
increase varied from poll to poll depending on the
phrasing of the questions and when they were asked.
What never varied is the public’s clear preference
for the elimination of non-essential government
spending over raising taxes.
Now
that a massive tax increase is about to become law,
the political pressure to cut spending will decline
unless responsible legislators take immediate and
firm action. The only effective way to realize the
spending reductions Warner concedes are possible is
through the appropriations process. The General
Assembly should not wait until January, 2006, to
begin forcing the issue. Work must begin now.
The
Senate Finance Committee has shown no interest in
eliminating waste or evaluating the programs already
in place. If any action on non-essential spending is
taken, it will have to come from the House of
Delegates.
The
House must find a way to augment its current staff
of budget analysts to make any substantial headway.
It simply hasn’t the present resources to
discharge its budget responsibility as it should.
Legislators
also must demand cooperation from the executive
branch. Sadly, Warner ignored formal requests by the
House this year for information about state agencies
and opportunities for reducing spending. Failure by
the House to insist that Warner respond fully and
promptly to those requests would be a dereliction of
legislative duty and a demonstration of weakness.
The
longer legislators wait before getting serious about
this undertaking, the longer Warner and executive
branch bureaucrats will have to avoid accountability
for the spending of the extra billions of dollars in
state money during the next biennium. Once the funds
work their way through the system without the
establishment of a baseline, the easier it is for
bureaucrats to confuse the process.
The
House Appropriations Committee should commit
immediately to developing adequate performance
evaluation standards for every state-funded program.
The committee should review in detail every aspect
of the January, 2003, report of the Commission on
Efficiency and Effectiveness, chaired by former Gov.
L. Douglas Wilder, and all actions taken or
contemplated by the Warner administration to
implement the recommendations of that commission.
The
combination of economic growth and reductions in
non-essential state spending will generate far more
than the increase in revenues resulting from the
recently approved tax increase. The General Assembly
has an obligation to conduct its own review of the
Commonwealth’s fiscal condition, the efficiency of
state agencies and the very need to continue each
state program. If the legislature doesn’t pursue
that course, it will have failed the taxpayers of
Virginia.
--
May 24, 2004
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