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Simplify
the Budget
An
obscure budget process clouds policy decisions in the
Commonwealth.
The
defeat of the regional tax referenda Nov. 5 has been
analyzed over and over again. At the risk of adding one
voice too many, I offer my own perspective: Voters
rejected tax increases based on the conviction that the
so-called budget crisis in Virginia is caused not by a
shortage of revenue but by an excess in spending.
To
grasp the origins of the spending crisis, one must
understand the workings of the state budget, the single
most important piece of legislation that comes out of
each session of the General Assembly. Unlike typical
legislation, which focuses on one specific subject, the
budget expresses the legislative and executive will on
countless policy areas. Money
equals policy, as demonstrated both in the affirmative,
when money is appropriated for a particular area, and in
the negative, when funding for programs is cancelled or
curtailed. One need only look at each session’s member
amendments (amendments to the budget sought by
individual members of the General Assembly) to see the
huge number of policy decisions that are reflected in
final approved budget.
Despite
the budget’s immense importance, the process of
adopting and modifying it is so complex that there may
be 500 people – and that’s probably an overestimate
– who really understand it. Two years ago, as deputy
secretary of commerce and trade, I would have numbered
among them, at least in my Secretarial area. Today,
after 10 months out of state government, I wouldn’t
make the list. The true experts on the process are found
in the General Assembly’s money committee staff and in
the administration’s Department of Planning and
Budget. Even in those agencies, the budget is so complex
that most people specialize in one or two secretarial
areas.
The
budget has developed into a very complicated document.
In 508 pages of fine print, the 2002 Appropriation Act
(the official name of the 2002-04 biennial budget)
appropriated more than $52 billion. By way of comparison
and as evidence of the huge growth in spending, the
1998-2000 biennial budget appropriated over $40 billion
-- $12 billion
less than just 4 years later.
To
catalogue the programs funded by the budget would be to
list the entire spectrum of activity in the
Commonwealth. In addition to funding the better known
state and local government activities, the budget
supports a wide range of non-state agencies (broadly
defined as any private and public entities that receive
state funds). Opening pages at random will locate
funding for obscure programs like the Sewage Appeals
Review Board, Indoor Plumbing Program, School Resource
Officer Incentive Grants Fund, Individual Student
Alternative Education Program and hundreds more.
Besides
spending money, the budget contains hundreds of detailed
directives on how state government should operate.
Simply put, the budget is the document where the
legislative branch micro-manages the activities of state
and local government. As an example, when I was in
office and working on an economic development deal, the
Commonwealth sold land to a prospect at a discount as
part of an incentive package. The prospect ended up
locating in Virginia and creating hundreds of jobs.
However, what seemed to us a creative way to attract
industry did not sit well with certain folks, which led
to §4-5.13(b) of the Appropriation Act mandating that
state land could be discounted
only if offset by funds coming from the Governor’s
Opportunity Fund. This is just one of hundreds,
if not thousands, of ways that the legislature manages
the executive branch in the budget.
The
budget’s complexity makes it difficult for the public
to appraise the need for the cuts that have been ordered
by the Warner administration. To understand what’s
happening, you start by comparing side-by-side
the 508 page Appropriation Act with a 317-page report on
the budget reduction plans. Few people have the time or
knowledge to perform this analysis. This opacity of this
process is disturbing because the Warner
administration’s budget reductions, like the General
Assembly’s original formulation of the budget, makes
policy on thousands of issues.
I
don’t claim to have all the answers, and it is easy to
“Monday morning quarterback” the work that has been
done on the budget.
However, the process needs to be simplified so it
can be better understood. This is particularly true in
the Commonwealth today when the governor exercises his
prerogative to cut state spending by 15 percent, the
maximum allowed by law, outside the normal, open
deliberative process. When the governor unveils his
budget amendments in December, even deeper cuts are
expected. Each cut is an expression of policy and should
be debated and understood prior to its enactment.
--
November 18, 2002
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