Bacon's Rebellion

Finally, a politician spoke out about Warner’s record

—

by

James A. Bacon
in

I was beginning to wonder whether I was following in the footsteps of the Greek philosopher Diogenes, who was known for walking in broad daylight holding a lantern looking for an honest man. I’m referring, of course, to the apparent unwillingness of the members of the General Assembly to point out that Gov. Warner has been less than forthcoming—some would say that he lied—in the budget projections he used in 2004 to justify the largest tax increase in the history of Virginia. (See “Republican Mutes.”)

Given the size of the budget surplus, we now can all agree that the tax increase was totally unnecessary. So either Gov. Warner falsified his budget projections or he is plainly incompetent, a rather unlikely possibility given his many successes in the business world.

Finally, Del. Jeff Frederick, R-Woodbridge, has spoken out. In a letter published in today’s OpEd section of the Washington Times, “Warner Shortchanging Virginians” the good delegate says it like it is:

“He [Warner] had to cry wolf saying we were in a fiscal crisis, and in order to do so, had to make sure that economic figures didn’t undermine his position. So, he either kept the good news of massive surpluses from all of us, or proved to be outright incompetent when it comes to budget forecasting. For a guy who personally made millions in private business, I just can’t see Mr. Warner messing up this bad without it being on purpose.”

I sure hope that other members in the General Assembly would have the integrity to tell their constituents that Warner lied and that the tax increase was totally unnecessary. What a refreshing breath of fresh air that would be instead of the customary obfuscations, falsehoods, and political spin we have come to expect from Richmond.

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  1. Anonymous Avatar
    Anonymous

    yawn! what a terrible controversy…

  2. Anonymous Avatar
    Anonymous

    Shouldn’t the General Assembly, both those for and against the tax increase, share the blame? Why doesn’t the General Assembly have its own ability to review and project its own revenue forecasts? The General Assembly certainly has little problem in spending the funds that come in as we saw with the rapid disappearance of the “surplus” earlier this year – how about spending a little of it for a budget and finance system that people can understand and decisions can be made?

  3. Anonymous Avatar
    Anonymous

    I guess as 6 billion dollar deficit would be more desirable?

  4. Anonymous Avatar
    Anonymous

    Mr. Frederick seems to be quite active today.

  5. Anonymous Avatar
    Anonymous

    Phil, you are a nut job

  6. Anonymous Avatar
    Anonymous

    Tell me about it. Frederick is scheduled to appear on several network news programs tonight:

    – Today – The Big Story with John Gibson at 5pm on Fox News
    – Today – Money Line with Lou Dobbs at 6:30pm on CNN
    – Today – Hardball – Chris Matthews at 7pm on CNBC
    – Today – The Derrick Meginity Show at 7:15pm on CBS Channel 9
    – Tomorrow – Fox and Friends 8:45am on Fox News

  7. Lovell Reiley Avatar
    Lovell Reiley

    Isn’t it amazing what calling on the Virginia governor to declare a state of emergency on our boarder (with North Carolina? West Virginia? DC? Maryland?) can do for your desirability as a talking head on “fair and balanced” news shows?

    I wonder how many times he’ll say that his mother is Columbian on these programs as a means to establish his “credibility” on the issue of immigration. He has a tendency to be a “Latino of convenience,” i.e., when it helps him politically.

  8. Steve Haner Avatar
    Steve Haner

    I don’t agree that the revenue surge was predictable at the time of the final budget and revenue compromise in May of 2004. Nobody could have predicted this balooning real estate market would have sustained as long as it has (with the resulting cap gains and recordation taxes); nobody can predict the equity market and nobody knew the fiscal impact of the language on the so-called “Delaware Holding Company” deductions under the corporate income tax. Some of us thought that would turn into a big number and maybe it has. Since nobody is paying me anymore to have a position on that maybe I’ll ‘splain it someday.

    And before everybody gets all hot and bothered, what will gas prices do to the current and future economy? The market now is stubbornly flat and many writers on this page predict the real estate bubble to blow. Anybody betting on the come? The roller coaster may be heading down again.

    There is some reason to argue that the tax bill might have been smaller, or the legislature could done a gum and bailing wire job for a year. But if you want to call the Governor a liar, Phil, don’t hint and wink. Spit it out. I can tell you from experience you’d better be ready to ride it out. Same with Frederick.

    The issue is not what happened then but what happens now. The Governor reports on the end of year results Monday. Stay tuned. I’ll be doing some data mining.

  9. Lovell Reiley Avatar
    Lovell Reiley

    Before I get flamed for misspelling border, please let me say, I can’t spell worth a darn.

  10. Will Vehrs Avatar
    Will Vehrs

    I’ve never criticized the General Assembly, the Governor, or the Republican compromisers who made the budget deal of 2004 happen. There was a deadlock between higher tax increasers and no tax inceasers. Something had to give.

    That said, it wouldn’t hurt for those defending the tax increase now, in the midst of a still rising surplus, to admit that their forecasts weren’t perfect and that they’ll try to do better.

    It wouldn’t hurt to acknowledge that the budget surplus won’t cover too many new programs, so spending restraint is needed so as not to add more burdens on the Virginia economy, especially in light of gas price increases.

    It wouldn’t hurt some politicians to stop “bad-mouthing” the surplus and admit it’s good news for Virginia.

    It wouldn’t hurt to admit that small tax increases may not automatically sink the economy.

    It wouldn’t hurt to stop fighting this old battle and instead see how candidates stack up on tax and spend issues for the future.

  11. Phil Rodokanakis Avatar
    Phil Rodokanakis

    It’s hard to take seriously all these anonymous postings. For all we know, it’s could be the same person making repeated postings. Can you guys at least use a pseudonym?

  12. Phil Rodokanakis Avatar
    Phil Rodokanakis

    Steve:

    You say that the revenue growth wasn’t predictable at the time. Well, that’s not exactly true. As of early 2004 (while the tax increase was being debated), the Governor’s own budget report showed that state spending could increase by 11% without a tax increase.

    The VA Club for Growth had published a number of Policy Commentaries addressing the fact that State spending was already projected to grow by 11% without a tax increase—more than double the growth in personal incomes (see various Policy Commentaries written in early 2004 at: http://pac.virginiaclubforgrowth.org/news.htm).

    But that wasn’t enough for the big spending liberals, like Gov. Warner. The Governor’s proposed tax increase was needed to finance a 13% increase in state spending.

    In retrospect, given that the budget surplus was much larger than originally projected, we could have financed an increase in state spending that was considerably higher than the 13% initially sought by the Governor, again WITHOUT a tax increase.

    So now we have the worst of both worlds: Not only did we imposed an unneeded tax increase, our legislators are spending the newly discovered budget surplus like drunken sailors, so that new spending is going through the roof. And the cries for more taxes have yet to subside. Sen. Chichester and others keep on talking of unmet obligations and the need to invest—read increase taxes—in Virginia’s future.

    Is this what passes for responsible governance nowadays? It’s time we hold our politicians accountable for their actions. In that regard, Del. Frederick’s OpEd is a step in the right direction.

  13. Phil Rodokanakis Avatar
    Phil Rodokanakis

    Will, I must respectfully disagree, my friend.

    You say: “It wouldn’t hurt some politicians to stop “bad-mouthing” the surplus and admit it’s good news for Virginia.”

    Obviously, you don’t see surpluses like I do. A surplus is nothing more than the government collecting more than it’s needed to run the state responsibly. In other words, they simply overcharge the taxpayers. You wouldn’t stand for a merchant refusing to refund the change due to you, when pay for your purchase with a bill larger than the face value of the merchandise. So why are you so eager to give the politicians a break when it’s obvious that they’re ripping you off?

    Furthermore, by collecting more than needed to run the government, the politicians are given a card blanch to increase government spending and the overall size of government. The political debate on whether it’s appropriate for government to grow in this fashion goes out the window—and political debate is what provides the brakes for unchecked government growth.

    You say: “It wouldn’t hurt to admit that small tax increases may not automatically sink the economy.”

    Tax increases always have a negative effect on the economy. Perhaps a small tax increase won’t sink the economy, but it has a negative effect nonetheless. And the 2004 tax increase wasn’t a small one—it was the largest tax increase in the history of Virginia. Why are you so willing to excuse a tax increase, in light of the fact that Gov. Warner could have achieved a spending increase greater than 11% without the need for a tax increase? Do you think that growing state spending by more than 13% makes fiscal sense?

    You say: “It wouldn’t hurt to stop fighting this old battle and instead see how candidates stack up on tax and spend issues for the future.”

    I think that fighting this old battle is crucial. Only by shining the light of truth can you expect the politicians to act responsibly. So far I have yet to hear Gov. Warner admit that his budget projections were off by 222% (that’s not a typo). How can we have honesty in government when politicians are allowed to propagate falsehoods, obfuscations, and lies?

    We’re not talking about political spin here. Warner and his allies have been successful in duping an unsuspecting and otherwise impervious public. Under the guise of budget reform they have tricked the public into believing that a tax increase was necessary to avert fiscal catastrophe. Nothing is further from the truth! So unless this discussion is repeated time and time again, Warner and his cronies are going to get away with one of the largest hoaxes ever perpetrated on Virginians.

  14. Nick Howard Avatar
    Nick Howard

    Phil,

    I don’t want to get involved in this discussion too much, but I agree with you 100%.

    Keep fighting the good fight.

    Thanks,
    Nick

  15. Anonymous Avatar
    Anonymous

    Oh, this old saw? Yawn.

  16. Gloating Avatar
    Gloating

    Warner has a 74% approval rating.

    And I love it.

  17. Phil Rodokanakis Avatar
    Phil Rodokanakis

    Gloating: I guess you don’t mind being lied to…

    Would you buy stock in a company whose CEO was untrustworty and a known liar? Why are you so willing to let the CEO of our Commonwealth get away with such blatant lies?

  18. Will Vehrs Avatar
    Will Vehrs

    Phil, you misinterpreted my comment about “bad-mouthing” the surplus.

    Each month that a new and larger surplus is announced, the higher tax folks say there is no surplus, there are bills in the drawer, there are unmet needs, there are the children … they ignore the good news about the economy and the obvious implication that the surplus does bring into question their tax hike and future tax hikes.

  19. Dave Burgess Avatar
    Dave Burgess

    Phil,

    Quoting from “Subpatre” from this thread , to Gloating I would say, “Thanks for showing what the term moderate and Democrat stand for: justification of dishonesty, praise for deceit.”

  20. Dave Burgess Avatar
    Dave Burgess

    Sorry, the link didn’t work…
    http://baconsrebellion.blogspot.com/2005/08/positive-uplifting-message.html#comments

  21. Steven Avatar
    Steven

    Phil — Keep up the good work!

    There’s a few of us who don’t believe in wealth distribution and refuse to endorse the welfare state mantra, while seeking to preserve opportunites and responsiblities of the individual.

    America first… buddy!

    ~ the blue dog

  22. Phil Rodokanakis Avatar
    Phil Rodokanakis

    Steve, DABurgess, and Nick: Thank you for the positive feedback.

    Will: Sorry that I misinterpreted your post. Now that you spelled it out for me–duh!–I agree with you 100%. Thank you for setting the record straight.

  23. Paul Avatar
    Paul

    DA Burgess/Phil:

    You’re insulting 75% of the electorate! But I guess that’s typical of the elitist elements of the Republican party (the Grover crowd). Don’t trust the will of the people – they’re being lied to by the homosexual controlled media!

  24. Steve Haner Avatar
    Steve Haner

    Phil, in your reply to me yesterday your logic escapes me — perhaps not accidentially. First the issue was did the Governor know that the revenue surge was coming. Would that L word (the shorter one, not Liberal) apply?

    Then the issue became why couldn’t the governor live with the revenue estimate he had, given that the growth was substantial already. Two good question but two different questions that should not be confused.

    On the second question, I agree with you. Insufficient effort was put forth to live with the estimate as it existed at the time. The House made an effort to produce a budget balanced with the existing revenue, but the legislature doesn’t have the resources to write its own budget bill and the result was easily dismissed by the other side. If you will re-read the Chamber’s statement on the issue from January 2004, we said the problem was not that the budget COULD NOT be cut, but that the legislature WOULD NOT do it. I’m not sure even our board caught that implication fully, but it’s in there.

    But on the issue that start this argument — what did the Governor know and when did he know it — you have failed to provide any support for your position and your personal attacks and liberal use of the L word weaken your credibility on the other question — Did we really NEED more money?

    At one point you accuse the Governor of knowing and pushing for taxes anyway, and then you criticize him for not knowing that he could eschew the taxes and still grow the budget another big notch. They can’t both be true.

    Great rhetoric, and pretty good footwork. But your logic is absolutely flawed.

  25. Anonymous Avatar
    Anonymous

    “A surplus is nothing more than the government collecting more than it’s needed to run the state responsibly. In other words, they simply overcharge the taxpayers.” (Phil)

    OK, I’m not very up to speed on the Virginia budgetary process, so please bear with me.

    So Virginia has to have a balanced budget, right? That means they forecast revenue and set spending at the same level. Let’s assume for a second that the revenue projects were made in good faith. Doesn’t that mean a surplus is good news?

    I wish I could find a cite for this, but forecasting revenue isn’t an exact science, if I recall.

  26. Anonymous Avatar
    Anonymous

    “There’s a few of us who don’t believe in wealth distribution and refuse to endorse the welfare state mantra, while seeking to preserve opportunites and responsiblities of the individual.”

    So, which line item in the budget is welfare, exactly? Which item would you propose cutting?

    Let’s have THAT discussion, instead of this basically dishonest one where you just toss around a lot of invective and rhetoric.

  27. Dave Burgess Avatar
    Dave Burgess

    Paul, I can only speak on behalf of myself;

    Insulting 75% of the electorate? Hardly! Questioning their intelligence, you bet.

    Let me give you a demonstration of the ignorance of the electorate.

    A few years back, I read about a purposed Winchester City sales tax increase. The proceeds were to supplement the city school funding.

    Reading further, things just did not add up in my head. I did some investigating by going on-line and researching tax collection and distributions from the State tax office and through other data found the tax was terribly unfair to the surrounding jurisdictions, especially my county.

    Media reports however painted a rosy picture of the tax. Of course, they would pretty the picture. Schools are a warm fuzzy.

    I went door-to-door talking with people about the facts I found of the true impact of the tax. I got hundreds of signatures on a petition against the tax. I drove a large van filled with county residence and two county supervisors against the tax. We went to Richmond and spoke at hearing against the tax. I help build a coalition on county supervisors from Warren, Shenandoah, Clarke, and Frederick to fight hard against the tax. And we won.

    AND GUESS WHAT…WHO DID WE FIGHT? RUSS POTTS WHO WAS SPEARHEADING THE TAX THROUGH THE GENERAL ASSEMBLY.

    You know what’s really sad? While I was going door-to-door and asking about the tax, Paul, I got one of three responses;

    a) No I don’t know a thing about it
    b) Yes, I know but isn’t only the city paying the tax
    c) Yes, I know, but you can’t fight city hall.

    I have first hand experience and feel I’m rightfully qualified to state that most of the electorate is ignorant (meaning lack of knowledge) of the tax issue. Tell me how many of the 75% of the electorate went any further than just read bias media reports about the latest and largest tax increase?

    Do not shoot at me just because most of the 75% are ignorant. It is just an unpleasant fact.

  28. Phil Rodokanakis Avatar
    Phil Rodokanakis

    Anonymous 10:42: Good try. But we’ve discussed this before ad infinitum. It’s not a matter of cutting anything!

    The question you ask is a favorite ploy of the liberal left (I’m not saying that you’re part of that group). They always ask what will you cut from the budget, so that they can go crying that we’re advocating cutting education, public safety, or benefits to old folks—the type of programs that will raise emotional passion.

    And unfortunately, conservatives fall into this trap, because they try to reason with the lefties, that perhaps cutting back on program “X” may not be unreasonable given its gargantuan growth over recent years. At which point the leftists paint them as out of touch, wanting to send us all back to the stone ages, etc.—you’ve heard the mantra before…

    The correct answer to your question is that you don’t have to cut anything. It would be great if we went back and cut the budget given its recent explosion over the last decade. But I realize that this isn’t politically feasible.

    On the other hand, what is easily accomplished is to cut back on the projected growth of the budget. If personal incomes are only growing by 4 or 5% per year, how can we justify government spending growing by 13% or more per year?

    That’s precisely why we need to enact spending limits as I elucidate in my column on BR this week (“Virginia’s
    Fiscal Windmill    ”)

  29. Phil Rodokanakis Avatar
    Phil Rodokanakis

    Steve: My logic appears flawed to you only because you don’t wish to connect the dots—it’s really simple if you give it an honest try! I don’t know how to explain it better, but I’ll give it another shot.

    We know that the budget submitted by the Governor showed an 11% increase in spending—WITHOUT tax increase. How can spending grow by 11% if we’re not already projecting a surplus?

    So the Governor was projecting a surplus all along. It’s just that the 11% increase in spending wasn’t big enough for him! So he wanted a 13% increase in spending and proposed a tax increase.

    Our (VA Club for Growth and other conservative organizations) argument all along had been that we don’t need a tax increase since the projected surplus could already sustain an 11% increase in spending. Frankly, we thought that an 11% increase was too much given that personal incomes were only growing by less than 5%.

    Somehow we are now being told that no one could have projected the budget surplus and that Gov. Warner just didn’t know that we would have a surplus—ergo the tax increase was necessary. In this bizarre scenario of events, the fact that the Governor was already projecting a surplus is lost and forgotten.

    Furthermore, there is little doubt that in retrospect the Governor and his administration intentionally downplayed the projected size of the surplus to justify the tax increase. But different people can debate whether the governor intentionally withheld information from the General Assembly on the projected size of the surplus. Unfortunately, no one other than Gov. Warner and his administration can answer this question.

    That’s why it’s imperative in my mind for the General Assembly to hold hearings on this matter. Perhaps they can appoint a commission to investigate this matter and report back to the people. The need for investigating this is imperative in my mind. You can’t have public trust in government if a cloud of obfuscations, falsehoods, and possible lies hangs over the heads of our government officials.

    That’s why I found it amazing that the Republican opposition has been muted on this subject as I expounded in my column “
    Republican Mutes    .” To my knowledge, Jeff Frederick was the first elected official to speak out about this along the lines I spelled out in my column—a fact that prompted me to make this original post.

  30. Anonymous Avatar
    Anonymous

    Wow, Phil, that’s a pretty incredible excuse to avoid saying precisely what you support or you don’t: from giving us or the public any sort of idea what the government you are pushing for would actually look like: what it would do and wouldn’t do, and how much it should cost (both a lower and an upper limit). The reality is, shrinking government involves cuts in something: some sense of priorities as to what the government should be doingt and what it shouldn’t. Some people are going to be affected positively, some negatively. But you refuse to let anyone know who that is in your scheme. It’s the politics of subterfuge. And you claim others are dishonest when you can’t even sell your own schemes openly (starve the beast is very far from an open and honest political strategy)?

    It’s also remarkably unproductive. You spend all your time politically on raising and lowering taxes and supporting candidates on that front, meanwhile failing to curb the growth of government whatsoever.

    I would take a long look at that and realize how self-serving it is. You get to rail about the government all you like, and given that you never accomplish anything, you get to be outraged in perpetuity!

    On the other hand, I think that if people started making an honest case about how the government needs to privatize things like transportation and education (which are such a big parts of the budget that you can’t avoid cutting them if you are to cut anything substantive) you might actually make some real headway and do some real good. I’d vote for a serious voucher system that would eventually transistion education long-term to a truly private (even voucherless) system. I might even vote for private roads, albiet only if I were sure that the market was truly going to be made free enough that it wouldn’t be distorted into chaos. But voting for cutbacks in “the projected growth of the budget” (without any idea of what or how) or tax cuts sans spending cuts is pure hot air: great for self-righteous anti-government politics, but intellectually empty and even avoidant.

    And surely you don’t think that personal incomes growing 4% on average is apples to apples with state spending growing 13%. There are host of other factors, from the incomes being an average increase to the state being a singular item to changes in federal and local taxes and the related shift of expenditure burdens. I’m not saying that the outcome might still not prove your point, but those two numbers are nonsense to throw together and pretend that you’re demonstrating anything helpful as a direct comparison between the two.

  31. Steve Haner Avatar
    Steve Haner

    It’s all about the words. Politics is a game played with language. The “wow” I got out of your last argument, Phil, is you think even the 11 percent projected revenue growth over the budget cycle — the 11 percent that was not related to any new taxes — represented a “surplus.” I would call that revenue growth, but not “surplus.”

    Your definition is a bit hard to defend, at least as hard to defend as the argument from the Governor and some in the Senate that there is NO surplus. Frankly you and they represent two extreme positions that kind of deserve each other — ying and yang. I’ll stick with the traditional definition: The “surplus” is the cash on hand COB June 30 as the fiscal year closes, less unpaid invoices — BOTH unexpected revenue and unexpended appropriations.

    Monday the number will be revealed. It will not be out of line with similar figures produced under Republican governors, who were not forced to deal with being called liars for their inaccurate projections (at least not from the right.)

  32. Paul Avatar
    Paul

    DA Burgess:

    I agree that the electorate is ignorant. Most don’t even know what a Delegate is, let alone who represents them.

    But I think this kind of thinking goes against the conservative populist philsophy of the day – that the people can best decide on issues of taxation, tranportation, ect – rather than the elites in government.

    Personally, I trust the elites more than the mob. I guess you do too. Representative government…

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