Legislators to focus on Gov. Kaine's proposed budget
COMMENTARY
By Sam Nixon (R - 27th) VIRGINIA HOUSE OF DELEGATES

Nixon

Virginia legislators returned to Richmond on Jan. 9 to convene the General Assembly's 2008 Session. The 60-day, or "long," session will focus on many important issues such as the budget, mental health reforms, impact fees, payday lending and energy conservation, to name a few. Because this year's session falls on an even-numbered year, one of the General Assembly's main duties will be consideration of Gov. Kaine's proposed budget for the next biennium.

The Virginia budget is a complex document that appropriates money from many different sources to a variety of functions and programs. It incorporates numerous trends and changes into a single dollar figure representing all state government activities, and is perhaps the single most important statement of policies and priorities for Virginia. Therefore, it rightly receives considerable scrutiny each session.

The legislature will again be faced with decisions on the competing interests that lay claim to the state budget. Tax revenues continue to rise but so do the requests for increased government spending. Some of the demands are worthwhile while others are not.

An example of a worthwhile need was brought to light by the shootings at Virginia Tech last spring. Government action will never be able to completely prevent the unlawful acts of another, but we discovered that Virginia's mental health policies require immediate reform. Some of the reforms like correcting flaws in the civil commitment process won't require much in the way of additional spending. However, the state clearly needs to appropriate additional funds to targeted areas of the mental health budget such as increasing the number of Mental Retardation Waivers.

As required by law, Gov. Kaine unveiled the first two-year budget of his administration on Dec. 17. The governor's budget typically forms the framework from which the final budget emerges.

Two distinct budget bills were introduced. The first, HB29, amends the current budget (set to expire on June 30, 2008) and the second, HB30, contains the governor's proposed spending priorities for the next biennium. The two-year biennial budget (HB30) includes spending for fiscal years 2009 and 2010.

Gov. Kaine's budget follows the trend in recent years of increased state government spending. His proposal would spend $4 billion more than the last $74 billion, two-year budget - an increase of about 5.5 percent over the biennium. This would be on top of the double digit increases reflected in the current budget.

As expected, the governor's budget reflects a blend of mandated requirements as well as spending on new programs. The budget includes roughly $950 million in additional aid for K-12 education, increased health insurance assistance to lower-income families, a pilot program for his pre-kindergarten program, increased mental health spending and a new state-funded medical insurance program for small businesses.

As with any budget proposed by a governor, there will be many items on which the legislature concurs. However, genuine concerns about the overall soundness and long-term fiscal integrity of the proposed spending plan have been voiced by senior lawmakers.

The governor proposes to withdraw $261 million from the Rainy Day Fund, the maximum allowed by the Virginia Constitution, to balance the current budget. The biennial budget includes a proposal to divert $180 million from the Transportation Trust Fund in Fiscal Year 2008 to fund new or expanded non-transportation programs. The budget also includes $3.2 billion in new debt, taking the commonwealth to the upper limit of its debt capacity limit.

Some have questioned the soundness of a budget that diverts revenues promised to roads and rail to new programs, like pre-kindergarten education. This runs contrary to the "lockbox" proposed by the governor and adopted as part of HB3202 - that no funds may be diverted from transportation. Also, tapping into the Rainy Day Fund at a time when revenues are still growing is not financially responsible.

The General Assembly should exercise fiscal prudence and avoid launching new programs that require long-term sustained spending commitments. That said, honest disagreements will emerge concerning Virginia's spending priorities and how best to fund them. Considerable compromise will be required by the General Assembly and the governor between now and when the session adjourns in mid-March.