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Robbing
Peter to Pay Paul
The
reluctance to deal with comprehensive tax and
revenue reform continues to trap the Commonwealth
in budget games.
DMV
Offices to Reopen" screamed headlines in the
Richmond
and other daily newspapers across Virginia
January 9. Gov. Mark R. Warner had surprised the
General Assembly the evening before by revealing
that he had found $6 million to apply to
Department of Motor Vehicles deficits.
"If
you approve my proposal," the governor
suggested in his State of the Commonwealth address
in the State Capitol, "the closed DMV offices
will be reopened." It was an applause line
for delegates and senators, second only to
Warner's statement, "This budget does not
rely on tax increases."
In
an otherwise upbeat and ambitious address full of
reform measures, it is too bad that Governor
Warner couldn't speak even more frankly and admit
that the budget does rely, as the General Assembly
seems to prefer, upon robbing Peter to pay Paul.
At one level, one could dismiss this habit as the
Commonwealth holding true to its English heritage
by miming Edward VI's appropriation of the lands
of St. Peter at
Westminster
to raise money for the repair of St. Paul's in London. More likely it reflects the complexity of state
government today and a reluctance to put
comprehensive reform pieces in place.
The
morning after the Governor's address, for example,
his secretary of transportation and his DMV
commissioner told General Assembly money
committees that, yes, this was a one-time windfall
solution from a recent settlement agreement
reached with Wall Street banks that had played
fast and loose with their analyses of equity
markets. And, yes, this was a temporary solution
to allow 12 DMV offices to reopen in a few week
because, yes, there was a structural deficit
between what DMV collects in revenues and the cost
of the services DMV provides citizens.
Republican
delegates and senators were most concerned with
the seeming conspiracy that had created, then
negated, a political issue to use against
Democrats in the coming November 2003 elections.
Already, they already were demanding more detail
on how the executive branch had come to the
conclusion to shutter specific DMV offices
located, it seemed, only in the districts of
senior Republican money committee members.
Suddenly, they wanted even more information on
what administration officials knew about the Wall
Street penalty payments and when they knew it.
Money
committee members quietly were pleased that no one
mentioned that delegates and senators already knew
about the deficit, but by their unwillingness to
raise revenues in 2002, had actually made the
choice to leave DMV short of funds and subject to
cost-cutting measures such as office closings.
They particularly were pleased that no one
mentioned that they did raise the fee Virginians
pay for a driver’s license by $2.00, but
earmarked the added revenue for something other
than DMV operations.
Because
the Commonwealth has a huge 2007 celebration on
the drawing board for the 400th
anniversary of the founding of Jamestown
and no money set aside for it, the General
Assembly channeled the millions of dollars
expected from the extra $2.00 from driver’s
license revenues for the Jamestown
celebrations instead of for DMV. This is classic
robbing Peter to pay Paul.
And
everywhere one looks in the budget, there are more
examples. By uniformly applying wireless E-911
charges of 75 cents a month to wireless companies,
the Commonwealth hopes to raise an additional $1.1
million this year. Meanwhile in another part of
the budget, the Department of Technology Planning
will transfer $4.1 million in unobligated balances
from the Wireless E-911 fund to the general fund.
Apparently the general fund is a greater emergency
than those crises reported and responded to
through the E-911 system.
At
a time when Virginia government has forced
Virginia colleges and universities into 20 and 30
percent tuition increases, it is removing $2
million in appropriations for Virginia resident
undergraduate student financial aid. And of course
there are the anomalies of state government
cutting Medicaid reimbursements for hospitals,
nursing homes, HMOs, health professionals and
pharmacists – recognize those for the price
controls they are -- at the same time it
authorizes higher payments for poultry farmer
losses to the avian flu (over and above insurance
reimbursements) and higher car tax reimbursements
for new car owners in Northern Virginia. This is
classic robbing Peter to pay Paul that seems both
fowl and unfair.
One
can't help but list new lines for Canadian rock
star Alanis Morrisette to add to an "Isn't It
Ironic" reprise given the dilemma the
Commonwealth has put itself in by continuously
failing to address structural budget imbalances.
Northern Virginia Community College President
Robert Templin, for example, told another
subcommittee January 9 that the Virginia Community
College System already is reaching enrollment
levels not predicted until later in the decade,
partially because the four-year public colleges
and universities are full. "We have to be
careful to avoid a bait-and-switch with our
students," warned Templin, "since part
of our attraction is the promise that good work
for two years at a community college paves the way
toward two more years elsewhere for a
baccalaureate degree."
The
positives in the early going of the 2003 General
Assembly session include reforms and initiatives
proposed by Governor Warner in education,
workforce training, transportation, public safety,
mental health, information technology, water
policy, state services to veterans, budget policy
and the size of state government. Any one of these
pieces in place, certainly all of them together,
not only move the Commonwealth out of budget
games, they help define the shape of other reforms
and initiatives to come. That is why state policy
and budgets should be seen as puzzles, not
secrets.
Adding
tax and revenue reform to the natural resource,
higher education and comprehensive urban policy
objectives the administration already has
announced for 2003 would give the General Assembly
the fuller picture it needs to get the next puzzle
pieces in place. Even Edward VI could see that as
a more worthwhile endeavor for the long term.
--
January 13, 2003
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