These include yet another proposal to privatize ABC stores, a new budget based on a phony surplus and an ambitious plan to borrow heavily to build roads despite his posturing as a fiscal conservative.
It’s a strange brew of initiatives, considering how he’s also pushing, with key Republican legislators, a so-called “Smaller Budget, Stronger Economy” strategy that bashes unions (as if they were responsible for the recent recession) and supposedly would create jobs.
Where to start?
McDonnell’s latest twist on his plan to sell off state-owned ABC stores would borrow ideas from other states, such as Ohio, that have privately-run retail stores but keep liquor wholesaling in the hands of the state. McDonnell spent $76,900 for the consulting firm PFM Group to come up with this new strategy after previous ones failed, notably since ABC stores would have generated $47 million a year less than they do now.
McDonnell claims that this latest plan would generate $200 million to $400 million for transportation. But it faces intense Democratic opposition, and one wonders why McDonnell didn’t try this latest wrinkle — keeping control of liquor wholesaling — first. One also wonders why he keeps after a scheme that would be marginally beneficial at best when there are far bigger problems out there.
Among those bigger problems is his budget, which he claims shows a $403 million budget surplus. Among pet projects are road building and more spending on other transportation, education and jobs creation.
But does he really have the money? He got his surplus by withholding payments to the state’s retirement system. That’s not really budget cutting, and the state is going to have to make those payments sooner or later.
McDonnell did achieve some cuts that supposedly contributed to the surplus by axing state payments for K-12 education and Medicaid — in other words — doing so on the backs of children and the poor. And as for boosting higher education, he’s proposing to cut 6 percent from the budget for the State Council of Higher Education for Virginia (SCHEV), which says it will fight McDonnell’s plan.
Lastly, McDonnell plans to borrow $3 billion over the next three years to fund transportation projects. I, for one, support such investments, believing they pay the state back over time in better economic growth. This ambitious plan, however, flies directly in the face of McDonnell’s political philosophy as a so-called fiscal conservative who is loath to spend.
And there are some other very simple ways to boost transportation funding. The obvious is raising the gasoline tax, since Virginia charges among the lowest tax rates in the country. Another idea floated by the Old Dominion Highway Contractors Association is to charge a “pump toll,” which would be a $1 tax every time someone fills up with gas. The money would go back to the localities and regions where it was generated and comes with the political advantage of seeming more like a “toll” than a “tax,” which conservatives tend to go for.
As McDonnell enters his second year in office, one can’t shake the sense that he’s making things up as he goes along. He didn’t think through his original ABC plans and didn’t even bother consulting with lobbyists, which may seem to be a strange complaint but not when you consider how things really work in politics.
It appears to me he’ll do whatever he needs to get things like a mention in Time magazine that’s he’s a new-style GOP governor who can produce a budget surplus in awful financial times. But he did so through smoke and mirrors and now is proposing to spend money he really doesn’t have.
Lastly, he wants a big borrowing campaign for transportation. Fine with me, but it does make him seem like the very politicians he campaigned against.
Will the real Bob McDonnell please stand up?
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