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Tone
Down the Budget Debate
It
would be a mistake for Gov. Warner to veto the
entire budget submitted by the General Assembly. He
could accomplish many of his
goals through the judicious use of the line-item
veto.
Well
now. After Gov. Mark R. Warner went on record saying
he intended to push for a tax increase at the 2004
session of the General Assembly, Democrats running
for re-election to the legislature in November seem
to be shying away from his position. Instead, some
favor running against Republicans for raising fees.
Have the Democrats thought this one through? All of
the Democrats on the House and Senate committees, as
well as the conference committee, supported the fee
increases. There was no substantial Democratic
opposition to the increases on the floor of either
house.
The budget debate this year was largely about
whether the Department of Motor Vehicles offices
would be reopened and whether public schoolteachers
and state employees would receive raises. The final
compromise funds all of these programs.
Democrats calling on the governor to veto the budget
bill aren't doing him or themselves any favors. He
can propose a few changes through the use of his
item veto, but a veto of the entire bill would be a
political disaster.
The principal reason Warner shouldn't go so far is
that he pledged during the 2001 campaign to avoid
the kind of budget impasse he criticized his
predecessor, Gov. Jim Gilmore, for causing. Warner
has put himself in a box. He can't break both of his
major campaign pledges if he hopes to have a
political future. To many who voted for Warner, his
promise of cooperation on fiscal matters was as
important as his promise not to raise taxes.
If Warner has a justifiable concern about the way
revenues are projected in the budget bill, he should
propose an appropriate revision at the upcoming veto
session.
If he doesn't want the DMV offices reopened, he
should veto the fee increases for driver's licenses.
If he doesn't want to see raises for state employees
and teachers, let him veto the price increases that
would be charged at state liquor stores.
One thing Warner and other
Virginia
politicians shouldn't do is to confuse the voters
about the difference between user fees and general
taxes. They should never disguise a tax increase by
calling it a fee increase, but a periodic increase
in true user fees is another matter altogether.
User fees are what individuals pay for a specific
governmental service, to use a government resource
or to cover the actual cost of a regulatory program.
Taxes, on the other hand, are involuntary exactions
imposed by government to fund general government
programs.
Charging a fee, where possible, is generally better
than imposing a tax because the cost of a particular
service is then directly related to what the user
pays. Obviously, not all government programs can be
or should be funded by fees, but
Virginia
has generally used this financing method where it
should be used.
User fees shouldn't be priced to provide a
cross-subsidy for other programs. Fees should be set
at no more than the reasonable cost of providing the
particular service. If fees are increased simply to
generate revenues, the increase is nothing but a
tax.
Where fees are appropriate to pay for governmental
services, they should be reviewed periodically to
keep pace with inflation and to match legitimate
agency expenses - nothing more.
If the fee increases are justified to catch up with
these costs, the governor should leave them alone.
If they are out-of-line with other states, he has
good reason to propose a rollback.
-- March
10, 2003
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