Gov. Mark R. Warner will go to his grave insisting, in the face of massive and recurring state budget surpluses, that the 2004 tax increases were needed. He sounded that theme again in his final speech yesterday to the General Assembly:

Two years ago, I came before you to tell you that the fruits of our [budget-cutting] labor had not been enough. Our first-ever six year financial plan showed that we faced a structural imbalance well into the future. It made us an unfit partner to local governments, a fair-weather friend to public education, and a weakening credit risk to Wall Street investors. …

Together, we hammered out our competing visions for the Commonwealth. Together, we achieved our goals of restored fiscal integrity. Together, we developed a fairer and more equitable tax code. Together, we made critical investments in education, public safety, and the core services of government.

Notice how Warner referred to the state’s largest tax increase not as a “tax increase” but as a reform of the tax code — a reform that just happened to yield an additional $1.4 billion in revenue for the biennial budget.

Warner’s justification for the tax increase is interesting. The tax hike is usually portrayed in the press as a prophylactic to ensure that Moody’s, the bond-rating agency, did not reduce Virginia’s coveted AAA bond rating. That argument has always been weak, because state revenues were rebounding ahead of projections at the very time that Gov. Warner was pushing through the tax hike. One could argue that Virginia was already in the clear.

The real reason for the tax hike is this (in the Governor’s words): “Our first-ever six year financial plan showed that we faced a structural imbalance well into the future.” Warner feared that revenue increases would be insufficient to meet Virginia’s long-term budget obligations.

But events have proved him wrong, and very few are willing to call him on it. Notice one word that never appeared in the Governor’s speech: “surplus.” He never once mentioned the recurring and growing budget surpluses — revenues consistently outstripping his six-year forecasts — that have taken place since 2004. The fact is, the growth in Virginia’s budget has been sufficiently robust to pay for all of Warner’s ongoing programs without a tax increase. This has been obscured by the fact that he has found clever ways to spend the surplus on one-shot programs such as university R&D, environmental clean-up and mental health reform.

The biggest failure of the Warner administration was taking that six-year budget forecast seriously enough to act upon it. Rather than waiting to see if events would bear him out, he argued for a pre-emptive tax increase. He got what he asked for, but events didn’t bear him out — his revenue forecasts were far too timid. No one in the General Assembly wants to make an issue of it because, after all, most everyone voted to go along; they share they blame. Besides, politicians are only too happy to spend the money.