by Dick Hall-Sizemore
As reported on this blog earlier by Steve Haner, Governor Youngkin has proposed new tax cuts totaling approximately $3.0 billion for the biennium. But the governor was not content with tax cuts. He also wants to spend more. His proposed amendments to the budget introduced by Governor Northam include more than half a billion dollars in new general fund spending. There are no proposals to cut the budget to cover these revenue reductions and additional appropriations.
Following are some highlights of these new spending proposals (amounts are biennial totals):
- Charter schools — $150 million
- Various economic development and employee training programs — $144.8 million
- State Police Training Academy (capital project) — $65.0 million
- School resource officers — $51.6 million
- Cybersecurity — $40.0 million
- Office of Chief Transformation Officer — $28.0 million
- HB 599 — local law enforcement — $27.0 million
- Slavery and Freedom Heritage Site (Richmond) — $10.0 million
A spreadsheet setting out all the governor’s proposals can be found here.
Budget politics could prove to be even more interesting than usual this session. To the usual tension between the House and Senate money committees, even in the best of times, one has to add the partisan divisions: a Republican governor, Republican control of the House, and Democrats with the narrowest of margins in the Senate. We could be headed for a repeat of prior years with the General Assembly adjourning without adopting a budget and then both sides engaging in a game of chicken leading up to the beginning of the new fiscal year, when a new biennial budget must be in place.
The governor also followed the unfortunate precedent of his predecessors of legislating in the budget bill. Here are the governor’s proposals for budget language on policies outside the budget arena:
- Beginning the process of withdrawing from RGGI;
- Requiring agencies to rescind their regulations related to the regulation that requires employers to implement COVID prevention measures;
- Delaying the planned increase in the gas tax;
- Prohibiting the promotion of inherently divisive concepts in public education; and
- Requiring that the costs of purchasing allowances in a carbon cap and trade program be recoverable only through a utility’s base rates.
My Soapbox
Cutting taxes and increasing spending. This is the approach taken in Washington by Mitch McConnell and Trump. Someone needs to tell the new governor that this does not work in Virginia. The state constitution requires that the state spend no more in general fund money in a biennium that it receives in general fund revenue. Reportedly, former Secretary of Finance Aubrey Layne has been advising the governor and the new Secretary of Finance. If so, Layne, who has been frequently praised on this blog, either has abandoned his former balanced approach to budgeting or the governor ignored his advice.
Cutting taxes and increasing spending are easy. They make people happy. On the other hand, cutting budgets can be hard. It can involve making tough decisions that end up making people unhappy.
There is one relatively easy way to cut a new budget — go after the new things being added. People are used to the status-quo, so reducing proposed new spending may dash some hopes, but will not hurt current operations. For example, the governor could have proposed: eliminating the $924 million put in by Northam to reduce the future obligations of the state retirement system; eliminating or reducing the $807 million put in for a 10.1% salary increase for state workers (5% each year); eliminating the $500 million for local school construction or renovations; or reducing the $1.8 billion put in for new construction projects at higher-ed institutions.
However, making those types of proposals would have made many people unhappy. Therefore, the Governor chose to make proposals that, if adopted, would blow a $3.4 billion hole in the biennial budget and, in effect, he told the General Assembly, “You figure out how to pay for it.”
Doing the easy stuff and shying away from the hard work and letting somebody else do it is one hallmark of irresponsibility. I hope this is not a harbinger of the way this governor is going to govern.
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