Category: Government Finance
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In Defense of McDonnell’s VRS Reforms
by James A. Bacon Yesterday I referred to Gov. Bob McDonnell as an “incrementalist reformer.” That’s not entirely fair. Some of his reforms come in pretty big increments, like his proposal to put the Virginia Retirement System back on a sound actuarial basis. If he can get his plan enacted over the inevitable objections of…
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McDonnell the Incrementalist Reformer
by James A. Bacon Gov. Bob McDonnell delivered a competent if uninspired State of the Commonwealth address yesterday, sounding the broad themes of restoring fiscal integrity to the state budget and harnessing the power of state government to create jobs. For the most part, his agenda reflects the conventional thinking that comes out of Virginia’s Republican Party…
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Yippee, Virginia Can Borrow another Half Billion!
The Commonwealth of Virginia can issue another $467 million in debt in FY 2012 and a like amount in FY 2013 without undermining its AAA bond rating, reports Debt Capacity Advisory Committee in its latest guidance to the Governor and General Assembly. Under the committee’s guidelines, debt-service payments cannot exceed 5% of annual “blended” revenues…
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McDonnell’s Campaign Against Public Schools
By Peter Galuszka As much as I hold James A. Bacon Jr., my esteemed fellow blogger, in the deepest of respect, whenever he says that he regards a package of legislation as the best, it’s time to start to switch on the Google. In this case, Jim is patting Gov. Robert F. McDonnell on the…
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Merry Christmas, Amazon.com!
By Peter Galuszka Christmas, regretfully, is forced, propagandized consumerism under the guide of market capitalism, albeit in new forms. One is digital sales, of which Amazon is dominant. Amazon also is about to become a big player in Virginia since it will open distribution centers in Chesterfield and Dinwiddie that will cost $135 million and employ…
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A 21st Century Revenue System for Virginia
by James A. Bacon Virginia faces long-term budget stress due to a slow economy and an outdated tax structure, contends Sara C. Okos, policy director of the Commonwealth Institute, in the latest edition of the Virginia News Letter. “What Virginia needs,” she says, “is a 21st century revenue system for a 21st century economy.” Okos…
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McDonnell Unveils 2013-2014 Budget
Gov. Bob McDonnell has submitted a proposed budget for the next biennium that is built upon anticipated revenue growth of 3.3% in 2013 and 4.5% in 2014. Crafted with an eye to maintaining Virginia’s AAA bond rating, which Moody’s Investors Services had placed on credit watch this summer, the governor couples modest spending increases in…
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Can We Call It a “Decelerated” Sales Tax Now?
Gov. Bob McDonnell is asking the General Assembly to hurry the phase-out of one of the jinkiest budgetary gimmicks ever foisted upon the people of Virgina, the so-called “accelerated” sales tax. About time! Too bad we can’t finish the job this year. The 2010 General Assembly required larger retailers — anyone with $1 million or…
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Rebuilding the Nest Egg
Gov. Bob McDonnell is tackling the under-funding of the Virginia Retirement System by proposing the largest employer contribution in state history. His proposed biennial budget will recommend a total of $2.2 billion in employer contributions by state and local governments in addition to fully funding the next installments of the 10-year payback of previously deferred…
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McDonnell Orders Closure of Mecklenburg Prison
Gov. Bob McDonnell has directed the Department of Corrections to close the Mecklenburg Correctional Center in Boydton. The decision was prompted by by Pennsylvania’s decision to remove nearly 1,000 prisoners housed under contract in Virginia, resulting in a loss of $20 million a year. Mecklenburg inmates will be transferred to the Green Rock Correctional Center…
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State Pension Liabilities Still Growing
Despite lower wages and salaries, the commonwealth of Virginia’s employee compensation package remains marginally competitive (defined as 90% or more of private-sector compensation), thanks to superior retirement benefits. But that fat retirement plan may not count for much if employees regard it as hopelessly under-funded and question whether they will receive the promised benefits. Between…
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How to Increase Transportation Revenue without Raising Taxes
by James A. Bacon NORFOLK–Declaring that transportation is a “core responsibility” of state government, Gov. Bob McDonnell outlined today a legislative package that would increase funding for roads, highways and transit from the General Fund. Traditionally, Virginia has paid for transportation projects primarily through dedicated revenue streams such as the motor fuels tax, a half…
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Second IG of the Day: State Budget Squeeze
Over the past three decades, state governments enjoyed steadily growing revenues. That felicitous trend ended abruptly in the 2007-2009 recession and shows no sign of resuming. This chart, taken from the “Fall 2011 Fiscal Survey of the States” shows the weak recovery. As the stock broker ads always warn, past performance is no guarantee of…
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Hair Braiders and Tow Trucks
Gov. Bob McDonnell has just announced a “government reform initiative” that will eliminate two state agencies and 19 boards and commissions, and consolidate another 23 boards and commissions. Sounds really impressive… until you realize that the reforms are touted to save only $2 million a year. In a budget exceeding $40 billion a year, $2…
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Washington on the James? Not yet, but We’re Working On It.
Virginia has a low rate of long-term indebtedness compared to other states, but the debt burden can still take a bite out of the budget. Virginia will pay nearly $600 million in interest in 2012 after borrowing record amounts during the past few years, reports Peter Smith for Virginia Statehouse News. Interest payments will increase…