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r= A < BCD
How
does this old formula help explain budget
gridlock, budget hopes and the difficulty of
change in Virginia? Read on...
Let’s
be honest. There isn’t a darn thing in the tax
reform bill Virginia’s House of Delegates may or
may not vote on April 13 that wasn’t laying
around in plain view eight or ten weeks ago.
Repealing the estate tax and lowering the sales tax on
food were there. Cigarette and sales tax increases
were there. Higher levels of income tax deductions
and exemptions and phasing out the age deduction
were there. And all the delegates were there on
January 14 at noon.
If
you love the governor, you can claim the ideas
were there in his original budget plan in
December. If you love the Republicans in the
General Assembly, you can claim the ideas were
there in the McDonnell-Hanger Commission a year
ago. If you love a former governor, you can point
to tax reform studies in the 1990s.
So why is the
House voting on a compromise bill on April 13
instead of March 13 or even February 13?
Recent
commentary has focused on the lack of leadership
as if a hierarchical, even dictatorial structure
of politics were in place in Richmond. Why hasn’t House Speaker William J. Howell,
R-Fredericksburg, just cracked the whip on his
Republican majority and produced a plan? For that
matter, why hasn’t the Governor brought the
tablets down from “The Third Floor?” A People
Magazine analysis can be entertaining, but a
better explanation explores what happens when change of any consequence occurs.
So,
start with the obvious. First, Bill Howell is a
man who answers his own phone at his solo law
practice. His view of the world doesn’t include
a pyramid of hierarchical organization. Speak your
mind, make your case, see if you’ve got the
votes is a pretty egalitarian style, but it
reflects the new management style of leader as
convener, clarifier, closer. This style was
articulated at the national level two decades ago
when then-Majority Leader of the U.S. Senate
Howard Baker noted, “The Majority Leader cannot
make the United States Senate do what the United
States Senate does not want to do.” Howell also
does not like “hundred percent-ers,” those who
have pre-fab solutions regardless of the true
nature of problems.
Second,
this is the information/communications age, even
in the General Assembly, where each individual has
her or his own sources of information, own
expertise and own entrepreneurial style, not to
mention laptop and Internet access. The House
Republican caucus reflects the world in that
respect – members are of many minds and many
alternative futures, all of which have played out
in newspaper headline-grabbing style during the
General Assembly sessions. Shortcomings in
followship are as big a problem in a decentralized
environment as those attributed to leadership.
In
such circumstances, as business executives
painfully have learned, one can encourage
participation in pragmatic solutions, but not
necessarily orchestrate it. Networks, not
hierarchies, become the most important operational
structure. Three months of failure to achieve a
budget agreement prove that attempts by the
Republican majority in the House to proceed in a
hierarchical, kill-all-tax bills, electoral
politics-above-policy manner did not work, at
least not for Republican delegates or for a
responsible budget process in the Commonwealth.
In
some respects these tactics did work, of course,
for the “hundred percent-ers” against taxes
who are outside the House. Tub thumpers Grover
Nordquist (Americans for
Tax Reform), James Parmalee (Republicans
United for Tax Relief) and other Republican Party
leaders have no responsibility for a budget in
Virginia, universities in Virginia, state police
officers in Virginia or any other public business.
They do have responsibility, however, for the
budgets of their own organizations and companies.
Tying delegates and local governments in knots for
three months has been good for their fundraising,
action-alert network, membership, phone-bank and
direct-mail revenues. Politics for political
consultants always is an end in itself.
Being
an elected official, particularly one in the
majority party tasked with governing, however,
requires something more. For a sworn official,
politics becomes a means to a public service end,
such as fulfilling a constitutional responsibility
to pass a budget for the Commonwealth
of
Virginia. Arguing about who is more right or what the
ultimate solution might be always gives way at
some point to hammering out a deal that a majority
can swallow. It’s the nature of a representative
democracy in which every representative arrives
with a view of the right thing to do.
Okay,
what about that mysterious formula headlined here
that is supposed to explain why a deal now is
before the House? Change (the delta sign) occurs
when the benefits of the status quo (A) are
exceeded by the pain of the status quo (B), the
vision of a different world (C) and the emergence
of practical steps toward that vision (D). The
governor and the Virginia Senate embraced revenue
change with new tax and revenue packages. They saw
pain. They coalesced around an investment vision.
They outlined steps to move forward with needed
revenues. But the House required more time to
appreciate the three elements needed to outweigh
the benefits of the status quo.
The
status quo in this case was the strong anti-tax
message brought by a majority of House Republicans
directly from their 2003 campaigns to the business
of the House budget. The message is three decades
old, of course, which adds to the fervency with
which it is embraced in a traditional state.
Giving up the most important issue to the
Republican base by raising taxes of any kind
simply was not considered an option. Status quo
benefits Republicans, partisans explained, who are
feeling no pain and who need no new vision. Status
quo already had stuffed the McDonnell-Hanger
Commission.
What
has taken over three months to build is the pain
of the status quo (B). Moody’s watch list for
the AAA bond rating resonates. The governor
illustrates the billion-dollar budget gap and
energizes the investment vision. The
Appropriations Committee Chairman unveils a
draconian budget if no new tax revenues were to be
adopted. Euphemisms for taxes wear thin. Local
governments and the public raise ever louder the
question, “Why aren’t you doing your job?”.
Business groups hold firm in the face of losing
certain tax exemptions and threaten to withhold
future campaign support.
The
vision of a different world (C) begins to take
hold. Local officials and community leaders
confirm that schools, local governments,
universities, state police, Medicaid waivers,
transportation projects and hundreds of other
public ventures could benefit from additional tax
revenue. House Republicans pass a bill to raise
over $500 million more in revenues. A world of
crumbling schools, second-level universities,
sicker seniors and higher local property taxes
doesn’t poll so well after all. Delegates who
convene public meetings get an alternate vision.
Finally,
a small group of Republican Delegates began to
speak out in the current special session on the
need to raise additional revenue through an
increase in the sales tax, in cigarette taxes and
in the recordation tax. Small steps toward the
vision (D) include closing some corporate
loopholes and repealing the sales and use tax for
formerly highly regulated public service
companies. Adjusting income tax deductions and
exemptions offset the regressive nature of a sales
tax increase. Speaker Howell and the House
leadership recognize the opportunity to move a
revenue bill to the floor, where a third of the
Republican caucus could join with Democratic
Delegates to raise almost a billion new dollars
over the next two years to fund programs the
majority of the House see as priorities for the
future of the Commonwealth.
Raise
the pain, build the vision and provide some doable
steps to get started. The benefits of the status
quo didn’t prove to be overpowering. Of course,
those attempting to reinforce the status quo have
tried to use the same formula. It is not clear,
however, how unleashing Arthur Purves (Fairfax
County Taxpayers Alliance) will hurt Republican
delegates. Purves polled 18 percent in a run for
the Fairfax County School Board in a two-man race
in 2003. Four other anti-tax candidates for the
Fairfax County Board of Supervisors lost big last
November. Nor is it clear why any House Republican
caucus member thought shutting down state
government and pinning the blame on the Virginia
Senate was a vision to build on.
But
one lesson does seem clear. If people want to be
professional anti-taxers or professional savers of
souls or professional bleeding hearts, they should
not seek elective office. Being a public official
gets in the way of single-minded missions. Having
responsibilities for a state government limits
options. Compromising with your colleagues to get
things done is a major part of the job. If you are
a “hundred percent-er,” the money and the
power are outside government.
April
12, 2004
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