Bacon's Rebellion

I tuned into the WCVE-TV program Perspectives today, seeking some forward looking Virginia punditry. Barbara Berlin’s guest would be Professor Stephen Farnsworth of the University of Mary Washington, discussing “What to expect from the upcoming Kaine administration and the battles the new democratic governor will face with the Republican-controlled legislature.”

Unfortunately, Berlin didn’t deliver as advertised. She spent 90% of the time asking Farnsworth questions about the “whys” of the November election results. Farnsworth gave a solid presentation of the now accepted conventional wisdom that is more than familiar to anyone who even casually reads blogs or follows politics.

In the waning moments of the interview, Berlin finally asked Farnsworth about the upcoming General Assembly session, but with the lead question, “Is Kaine too liberal?” Farnsworth couldn’t do too much with that, pointing out the obvious: “We’ll have to see what Kaine proposes.”

Remember that you heard it on “Perspectives” first: Kaine will cultivate an alliance with the more moderate Senate, but will have “rougher sledding” with the House of Delegates. The House will be “skeptical and suspicious, not inclined to cooperate.”

I hate to rag on Barbara Berlin, but she didn’t deliver the promised program. What good are pundits if we can’t make them to go on record with some predictions? Guess we’ll all just wait “to see what Kaine proposes.”

13.7 percent.

That’s how much state spending will grow under Gov. Mark R. Warner’s proposed Fiscal 2007-2008 budget over the current budget. Even with inflation warming up, that’s a rapid expansion. But only one reporter who covered the Governor’s presentation noted the fact. Kudos to Warren Fiske with the Virginian-Pilot, for picking up on it.

That number did not appear in the Governor’s speech. Fiske had to track down the number himself. No other newspaper — not the The Washington Post, the Richmond Times-Dispatch, the Associated Press, the (Newport News) Daily News or the (Fredericksburg) Free Lance-Star — included the figure in its coverage of the governor’s speech. Apparently, the continued ballooning of the state budget is a non-story.

Even Fiske did not stack up the Governor’s rhetoric of fiscal conservatism against the spending history during his entire four-year tenure, his claims of having addressed a “$6 billion budget shortfall,” or the chronic surpluses that have cropped up since the 2004 tax hike. No, those bold speakers of truth to power in the Virginia press corps presented the Warner budget story largely as the Governor spoon fed it to them.

Nothing in the Governor’s speech or in any of the articles written about it would allow readers to calculate even the broadest of trends in state revenues. For that, you have to visit Bacon’s Rebellion. Here are the General Fund numbers derived from historical documents posted on the Secretary of Finance website:

Fiscal 2001…….. $11,798 million……………. Gilmore
Fiscal 2002…….. 11,406 million (-3.3%)…….. Gilmore/Warner
Fiscal 2003…….. 11,910 million (+4.4%)…….. Warner
Fiscal 2004…….. 12,931 million (+8.6%)…….. Warner
Fiscal 2005…….. 14,427 million (+11.6%)…… Warner
Fiscal 2006…….. 15,355 million (+6.4%)…….. Warner/Kaine (est.)
Fiscal 2007……… 16,141 million (+5.1%)……. Kaine (proposed)
Fiscal 2008……… 16,996 million (+5.3%)……. Kaine (proposed)

(Note: These basic numbers do not exist on one Web page. I have pulled them from several different documents found on the Secretary of Finance’s website. I believe I’m comparing apples to apples, but I’m not totally certain that I am. If someone has more authoritative numbers, please correct me.)

Analysis: Over the five-year period extending from Gov. Gilmore’s last full fiscal year in office to the current fiscal year — a period that includes the recession and Warner’s painful budget cutting in fiscal 2002 — General Fund revenues have surged 30.1 percent. Inflation has amounted to about 12 percent over the same period. Bottom line: Even including a painful recession and discounting for inflation, state government revenues/spending has increased 18 percent over five years. (If you want to choose the four-year time frame of Warner’s tenure, then the spending increase is even bigger.)

Reporters in the Richmond press corps need not accept my analysis, but surely they could have made at least a minimal effort to put Gov. Warner’s budget presentation in a long-term perspective. After all, Warner is running an undeclared candidacy for president largely on his record of fiscal probity. For reporters to simply recite a laundry list of spending proposals is unforgivably lazy.

Gov. Mark R. Warner has submitted a $74 billion state budget for fiscal 2007 and 2008 — a $10 billion increase over the current biennial budget. There is a range of good, bad and ugly in his proposals. In this post, I shall address the positive.

“In this budget,” the Governor declared in presenting it to the General Assembly, “we will not make spending or tax policy commitments whose cost will show up or escalate in the out years. We will not start major new programs. And, we will not casually assume that Virginia’s revenues will continue to show extra-ordinary growth for the next two and a half years.”

That sums up the spirit of the budget proposal pretty well. Warner has hewed to the path of fiscal righteousness in refraining from launching expensive new programs. He’s poured tons of money into existing programs, as I shall detail in a follow-up post, but he hasn’t set up any significant new cost centers that will impose an ongoing drain on state finances. Given the temptations posed by record revenues gushing into the state Treasury, the Governor is to be commended for his self control.

Instead of spending the money on ongoing programs, he’s using $1.5 billion in excess cash largely for one-time capital investments that are, as he describes them, either (a) “urgently needed,” or (b) “smart investments in economic growth, or a better quality of life for Virginians.”

Given the fact that Warner is intent upon spending the money, his selection of priorities is reasonable. He is investing in knowledge creation with his R&D initiative, restructuring mental health programs to make them more effective, accelerating investment in Chesapeake Bay clean up, and supporting various transportation projects. We can all quibble with the list — I think he could have spent less on transportation, for instance, and dedicated more to accelerate deployment of broadband outside Virginia’s major metro areas — but the money, for the most part, goes to purposes that enjoy broad support.

Finally, the Governor is showing fiscal restraint by making conservative revenue assumptions. His budget projects revenue growth of 6.1 percent for the current fiscal year (2006), 6.0 percent for fiscal 2007, and 5.3 percent for fiscal 2008. That’s very conservative — far below the rate of revenue growth of the past few years. It’s better to aim low and wind up with a surplus than to aim high and wind up cutting.

Late yesterday, Sen. Creigh Deeds, trailing by a slim 323 vote margin in the Attorney General race, filed a motion with the City of Richmond Circuit Court requesting that optical scan ballots be rerun in 168 precincts. His justification is a 2.84% “undervote” statewide, but a 3% “undervote” in those optical scan precincts.

A hearing on the motion is scheduled for 3:30PM on Monday. Unfortunately, presiding Judge Markow does not allow reporters to record the proceedings.

Former Virginia Governor Gerald Baliles has been named the fifth director of the Miller Center of Public Affairs at the University of Virginia. The Miller Center is a nonpartisan institution dedicated to studying U.S. national and international policy, with a special emphasis on the American presidency. Baliles will retire from the Hunton Williams law firm on March 31st and take the reins of the Center on April 1.

Gov. Baliles replaces Philip Zelikow, who left in January to become counselor of the U.S. Department of State.

Baliles, with his long record of public service at the highest levels, is an inspired choice. I can’t help but note that like so many other organizations in Virginia, the Miller Center conducted a “national search” but found a distinguished choice nearby in the Commonwealth.

According to Richmond Times-Dispatch reporter Michael Hardy’s front page story, Governor Warner’s budget submission “will give state agency heads about $16 million to help recruit, retain and pay experienced workers more in their departments.”

Obviously, I haven’t seen the details of this proposal, but it sounds like a terrible idea to me. Agency heads are gubernatorial appointments who breeze in every four years and are easily made captives of the prevailing agency atomosphere. To give them more discretionary authority to pay some employees more is an invitation to favoritism and institutionalization of even more subjectivity than already exists in the state workforce.

State jobs are not exactly going begging–recent state jobs that I’ve seen posted attract in excess of 100 applicants just from local advertising. As for retention, for virtually no new money agencies could design entry level jobs, career paths, and succession plans. That’s what would increase retention. Why give agencies money for things they could and should do with existing resources, or for things they don’t even need?

The problem with state government compensation is that people at the bottom rung make too little and see little chance for advancement. Administrative personnel do the research and make the powerpoint presentations that the high-priced help takes to conferences, for example. Rather than seek to promote from within where possible, the state recruits new people off the street.

This might be a good idea if agencies had to apply for the money and submit a plan, assuming somebody with an ounce of skepticism reviewed the plan before authorizing the money.

On Tuesday,lost amid news on the budget and Kaine cabinet appointments, Virginia Governor Mark Warner announced that he had signed Executive Order 103 revising and expanding the state’s program to enhance the participation of small, women and minority owned (SWAM) businesses in state contracting.

Dissatisfied by the state’s meager progress since a statewide disparity study identified wide gaps between the availability of SWAM businesses and their utilization in providing goods and services to the state, the Governor imposed new requirements on state purchasing officials, including a requirement not to use past experience to exclude suppliers and specific authorization to contract with SWAM businesses where they are not the low bid.

Executive Order 103 builds on steps first laid out in Executive Order 29 issued by the Governor in 2002.

Despite the best efforts of the Governor and his cabinet over the past three years, Virginia SWAM businesses, which make up 99% of all Virginia businesses, still are not receiving their fair share of the state’s business. The Governor’s action this week will help Virginia continue to make progress toward full equality of opportunity in state contracting for all small, women and minority businesses doing business in the Commonwealth.

Contrary to a rumor that surfaced a few weeks ago, Governor-elect Kaine has decided to fill the Secretary of Technology position. His choice is Aneesh Choprah of Arlington, an information technology executive and campaign contributor. Choprah certainly appears qualified and, according to Jeff Schapiro, said at his introductory press conference, “I view myself in many ways as the technology advisor to all the other secretariats.”

Choprah might do well to look beyond all the fancy hardware and gadgets to check if all the information technology infrastructure is really delivering information. For all the money spent on technology, many Virginia government web sites remain stubbornly impervious to offering user-friendly information. Failing to provide useful information raises or sustains unnecessary costs down the line.

Let me just give one small example of many–I’m considering doing a larger commentary on this for the Bacon’s Rebellion e-zine.

The Virginia Employment Commission administers the state unemployment insurance program for employers. Many would-be employers want to factor in the cost of unemployment insurance before they hire someone. I challenge our readers to go to the Virginia Employment Commission website to find the unemployment insurance rate. When someone can’t find the rate online, they are forced to make a phone call to ask. They get a tape, they get frustrated, and they wonder if Virginia really is as “business friendly” as advertised.

Virginia could do a lot more with existing resources in the area of information technnology, but I know that’s not as sexy as big contracts with CGI and Northrop Grumman.

Gov. Warner announced today that the budget he’ll submit tomorrow will include $625 million in general funds for transportation.

$339 million will go to one-time project funding–completing federal earmarked projects, matching new federal earmarks, and Port of Virginia improvements.

$229 million will go to previously approved transportation bonds.

$57 million will go to public transportation capital projects.

Is it ok to use general funds for tranportation? A lot of folks seemed to think that was a terrible idea during the gubernatorial campaign.

In today’s Washington Post, columnist Richard Cohen is critical of Sen. Hillary Clinton and her position on flag burning. He offers this Virginia gem:

The ubiquitous Larry Sabato, the University of Virginia quotemeister — need a quote/do not tarry/call U-Va. and ask for Larry — opines that Clinton is readying herself for a presidential run by adjusting her tint, toning down the blue and heightening the red. He fancies that Virginia Gov. Mark Warner’s incipient presidential campaign is already pushing Clinton to the center. A New York Times editorial reached a similar conclusion. It suggested that she was “pandering” to the 70 percent of Americans who think outlawing flag burning is a dandy idea.

If Gov. Warner is influencing Sen. Clinton, he is a more credible candidate than even I thought. But did Cohen have to lampoon Professor Sabato?

A brief but fascinating passage appeared in a Free Lance-Star story about a legislative luncheon hosted by the Fredericksburg Chamber of Commerce. House Speaker William J. Howell “would like a thorough shake-up of the way the Virginia Department of Transportation does business,” reported Chelyen Davis. “While senators are talking about tying road planning to land use planning, Howell said he’d like to see VDOT use different measuring sticks to determine the success of a road project.

“For example, instead of measuring a project by whether it gets done on time and on budget, Howell said, he’d like to measure things like whether that road mitigates congestion“.

Now that’s breakthrough thinking! Imagine if the Kaine administration developed a methodology for ranking all highway projects, all rail projects, all demand-mangement projects (like telecommuting), and all capacity-improvement projects (like synchronized stop lights) by how much traffic mitigation they offered per dollar spent. Imagine if transportation projects were funded on a Return on Investment basis!

Do you think such a list would bear any resemblance to the top-priority projects on the books today? If we could combine this idea with the idea of connecting transportation and land use planning, we could truly revolutionize transportation policy in Virginia. (Note: This post also appears on the Road to Ruin blog.)

Commonwealth Conservative is all over the political implications of Del. Preston Bryant’s apparent appointment to be secretary of natural resources in the Kaine Administration.

I know it’s fashionable in some conservative circles to dump on Bryant for leading the “Gang of 17.” While I wasn’t crazy about the 2004 tax package, I have always felt Del. Bryant acted in good faith, trying to compromise between higher tax factions and no new tax factions. The session was in overtime, after all.

I have not had occasion to correspond with many Delegates, but I have exchanged some emails with Del. Bryant. He was thoughtful and knowledgeable about some relatively arcane matters I brought to his attention. He was also a real rarity in elected office: a regular newspaper columnist, for the Roanoke Times. Bryant reads and occasionally comments on blogs, another admirable trait, as far as I’m concerned. He’s an all-around stand-up guy.

Natural Resources is not known in state government as a hotbed of innovation or efficiency, so Del. Bryant has a lot of opportunities in both policy and management. I wish him well and hope that his successor in the House will be of similar character. I’m sure Not Larry Sabato will tell us all we need to know about the potential candidates, as he always does so well.

Gov. Mark R. Warner has proposed a $243 million environmental package — the largest single investment in water quality in state history — for the Fiscal 2007-2008 budget. The initiative will, among other objectives, accelerate upgrades to 92 waste water treatment plants in the Chesapeake Bay watershed, helping meet the state’s new, “strictest in the nation” water regulations. (See the Governor’s press release for details.)

There has been a common theme to Warner’s recent budgetary announcements. The bulk of his new spending initiatives — $550 million for R&D in Virginia’s public universities, $290 million to build new, state-of-the-art mental health facilities, and $243 million dedicated to water clean-up — represent one-time expenditures.

Perhaps I’m a trifle over-optimistic here, but my sense is that Warner is being careful not to dump the state’s massive budget surplus into ongoing programs that will inflate the state’s long-term spending commitments. As I’ve argued before, if Warner isn’t willing to give the money back to taxpayers — which, politically, he can’t without admitting that he’d made a mistake raising taxes back in 2004 — the next best use is to apply the surplus funds to one-time expenditures that don’t permanently swell the size of state government. Bravo, Governor, Bravo!

Still, I can’t help but choke on Warner’s rhetoric. “Getting our state finances back on track,” he said, “has allowed us to make significant progress… blah, blah, woof, woof…”

This would have been more accurate: “Increasing taxes back in 2004 gave us a surplus we never anticipated, but now that we’ve got more money than we ever dreamed of, we’re putting it to good use.”

The Winchester Star is reporting (requires registration)that the gubernatorial campaign of Sen. Russ Potts owes $339,125.31. Cash on hand is only $86,971.69.

I was a harsh critic of the Potts campaign, but I take no joy in his indebtedness. I would rather see more third party candidates than less and the financial problems Potts faces have to be discouraging to future third party challengers. It is doubly discouraging when we remember how much support Potts got from Virginia editorial pages and so-called opinion leaders. Few third party candidates can expect that kind of fawning attention.

Sen. Potts only got 2% of the vote despite spending a lot of money (not a lot in comparision to the major party candidates, but a lot nonetheless). I suspect he would have gotten the same number of votes, if not more, if he had run a savvy internet/blog intensive campaign instead of the derivative kind he was suckered into buying.

Maybe that’s the lesson. If you’re going to run a third party campaign, forget the high-priced consultants and don’t count on expensive, “quirky” ads to help you catch fire with the voters. It’s almost counterintuitive, but we could have more and better third party candidates if they run shoestring campaigns instead of becoming slaves to fundraising.

Virginia’s welfare caseload has declined by more than 50 percent — to 36,000 — since 1995 when welfare reform took hold. Many former recipients still rely upon government largess such as food stamps, Medicaid, child-care subsidies and energy assistance averaging $3,700 per family per year. But they are increasingly self sufficient. Those numbers come from a JLARC study, “Self-Sufficiency Among Social Services Clients in Virginia,” reports Stacy Hawkins Adams with the Richmond Times-Dispatch.

Virginia ranked No. 1 nationally among states based on the proportion of welfare recipients who entered the workforce in 2004. But the situation is far from perfect: Virginia ranked only 48th nationally for increased earnings for welfare recipients, the study noted.

It would be wonderful if everyone in Virginia could earn enough money to climb above the poverty line and become totally self sufficient. That isn’t likely to happen any time soon. Only 54 percent of those surveyed had high school dipomas or GEDs. The occupational prospects for high school drop-outs will only get worse as occupations in the U.S. economy become more and more knowledge-intensive. But the situation is vastly preferable to what it was before 1995 when some welfare mothers never left a state of welfare dependency.

Hopefully, we’re witnessing the shrinking away of the multi-generational welfare class and, with it, a cultural change among Virginia’s poor that will better equip them to participate in mainstream society.