Category Archives: Budgets

A Spending Boost We Don’t Need

Here are a couple of items in the Governor’s proposed budget that the Commonwealth could do without.  Both are in the Office of the Governor, each with a budget request of $599,192 for each year.  That is a total of $2.4 million for the biennium.  The description of the purpose of each budget amendment comes from the Budget Document, prepared by the Department of Planning and Budget.

Office of Chief Diversity Officer.  “This office promotes inclusive practices across Virginia state government; implements a strategic plan to address systemic inequities in state government practices; and facilitates ways to turn feedback from state employees, external stakeholders, and community leaders into concrete equity policy.”

From my Soapbox: This is a classic bureaucratic statement that says nothing.  This sounds like a make-work position.  To top it off, the office is to have three employee positions: the director and two others. Continue reading

K-12: The Mo’ Money Drumbeat Plays On

by James A. Bacon

The Richmond Times-Dispatch has posted a front-page story today exploring all the reasons why Virginia needs to increase its K-12 education spending. Student achievement on standardized tests are declining. School facilities are crumbling. Racial/ethnic disparities persist. And then this factoid: State inflation-adjusted spending per student is 8% lower than before the Great Recession. Mo’ money is needed for reading specialists. Mo’ money for smaller class sizes. Mo money for schools with low-income students. Mo’ money for teacher pay. Mo’ money for English-as-Second-Language students. Mo’ money for everything.

The article quotes spending advocates as arguing that even the $1.2 billion in added biennial funding recommended by Governor Ralph Northam is not enough to meet K-12’s voracious needs. Says Caroline County teacher Rachel Levy: “The governor’s budget proposal for education is a step in the right direction, but unfortunately, it’s not sufficient.”

Northam comes across as the voice of fiscal reason. “Would we like to do more?” he is quoted as saying. “Absolutely. But we have to live within our means. Education will continue to be a top priority for us, but you can’t make up in just one year.”

Nary a dissenting voice was seen. The article contained not one hint of a whisper of a suggestion that maybe $1.2 billion was excessive in any way, or that there might be other ways to view the educational budget. The debate is entirely between the moderate Left and the far Left. Continue reading

The 20% Growth Claim Is Not Misleading

HB 30 Appropriations Total As Introduced
Year Grand Total ($Billions) % Over Previous % Over 2010
2010 77
2012 86 12 12
2014 97 13 26
2016 109 12 42
2018 116 7 51
2020 139 20 81

By Steve Haner

As I noted earlier, defenders of state spending growth have a number of tools and tactics handy to confuse voters, but facts are stubborn things.  So, I’m going to explain a bit further how this proposed budget grew 20% over its predecessor in just one two-year cycle, with some context. The table above should help.

Virginia sets its state budget for two years at a time, with a new two-year spending plan introduced in December of every odd-number year and considered in the session that follows in the even numbered year. 2020 is a budget year. For convenience, the bills are always House Bill 30 and Senate Bill 30. In December, Governor Ralph Northam did as his predecessors have done for decades and published his budget.

In the opening summary, known as the enacting clause, there are tables that always end with a grand total for all proposed spending from any and all categories. The number I’m using is right at the end of that. Note, I am not using the higher revenue estimate – just the proposed appropriations.

The introduced budget is just that, and the General Assembly will change it. It will add new spending based on higher revenue estimates (or cut, if the estimates collapse in the February recalculation.) It may create new revenues by changing tax laws or creating other revenue streams, as happened with the Medicaid expansion funded by new assessments on hospital revenues. Continue reading

A 20% Budget Explosion That May Keep Growing

The new spending over the next two years by major category. This is for the smaller $48 billion general fund. No such pie chart was published by the Department of Planning and Budget for the combined $139 billion full budget.

By Steve Haner

The interesting thing is not how Virginia’s overall budget has grown 20% in just two years (seen that number reported anywhere else?) What’s interesting is how many interest groups are openly pushing to make it even larger. The $23 billion increase is not enough!

Just two years ago, in December 2017, Governor Terry McAuliffe dropped in his proposed budget for the budget cycle we are still in, Fiscal Years 2019 and 2020.  Before the 2019 General Assembly worked its magic, the baseline two-year total for spending he proposed was $116 billion.

Comparing an apple to an apple (which the political class discourages) the equivalent figure for the budget Governor Ralph Northam published last month is $139 billion, growth of $23 billion or 20%. That is the general fund and the non-general fund combined. It becomes more and more obvious that the non-general fund is the cart pulling this horse. At $90 billion over the next two years, it is almost double the proposed $48 billion general fund. Soon it will be more than double.  Continue reading

Radford’s $100 Million Boondoggle


by James A. Bacon

Governor Ralph Northam has allocated nearly $101 million in the next biennial budget to build the “Center for Adaptive Innovation and Creativity” at Radford University. If approved by the General Assembly, the allocation would represent the largest capital construction project in the history of Radford University, both in terms of total funding and square footage.

According to the Roanoke Times, the facility will include classrooms, studios and exhibition spaces, clinical research and laboratory space, and multi-use environments such as maker spaces, computer centers, and simulation and virtual/augmented reality labs.

That’s an eclectic mix of facilities. What, exactly, will the Center for Adaptive Innovation and Creativity do? According to a Radford University document, the Center will advance an inter-disciplinary approach to health and the arts. As an example of the kind of activity that would take place there, the document says that nursing students could interact with actors trained to simulate patients.

Perhaps I’m being uncharitable here, but this sounds like the kind of project that gets funded when the thinking in the governor’s office goes something like this: “Well, we’re giving money to everyone else in higher ed, and it’s been a while since we’ve tossed Radford a bone, and this is at the top of their wish list, so…” Continue reading

Merry Christmas, General Assembly

by Dick Hall-Sizemore

The most surprising item in Governor Northam’s proposed budget is the $200 million Christmas present to the General Assembly.

It comes in the form of an annual $100 million appropriation in the Central Accounts section of the budget bill for “uncommitted contingencies.” It is not unusual for that budget Item to contain appropriations for contingencies, such as industrial development actions, or for some special state agency programs. However, there is always some accompanying language setting out the limitations or conditions under which it can be spent. For this $200 million, there is no guiding or controlling budget language. Continue reading

“The Most Progressive Budget in Virginia’s History”

by James A. Bacon

In the introduction to his budget statement released yesterday, Governor Ralph Northam described his proposed 2020-22 budget as “the most progressive in Virginia’s history. If by “progressive” he means “leftist,” with a strong propensity for taxing, spending and wealth redistribution, it’s hard to argue with him. That’s exactly what it is.

In previous posts, I’ve critiqued the governor’s major spending initiatives, totaling about $2.5 billion in ongoing and one-time spending proposals, so I will not repeat myself here. Instead, I focus on the revenue side of proposed budget. I’ll address the negatives first, then touch upon a couple of silver linings.

Northam proposes to raise taxes even while the economy is growing and tax revenues are increasing. According to the Economic Outlook and Revenue Forecast for the 2020-2020 Budget, General Fund revenues are predicted to grow 4.5% in FY 2021 and another 3.7% in FY 2022. That represents a healthy increase over inflation, which is running around 2%. If Virginia needs to raise taxes when revenues are growing, what will happen when a recession makes them shrink?

The governor is obscuring how much the tax hikes add up to. Bits and pieces have been made public, but the big picture is elusive. Northam proposes to gain $340 million over two years from killing last year’s tax relief fund; $230 million in taxes on cigarettes and other tobacco products; $125 million on so-called “games of skill” that compete with the Virginia lottery; and a 12-cent increase in the gasoline tax over three years, partially offset by killing annual auto inspections and cutting the state vehicle registration fee in half. Continue reading

Taxpayers “Clinging” to their Income in a Moderately Taxed State

Click to enlarge image. Data source: USGovernmentRevenue.com

by James A. Bacon

In his budget roll out yesterday Governor Ralph Northam proposed hikes to tobacco and gasoline taxes and a clawback to taxpayer relief fund enacted last year in response to changes in the federal income tax code — an increase in the tax burden well in excess of a half billion dollars a year. (In none of the articles and documents I’ve seen have I been able to locate a full tally — gee, I wonder why.)

In his presentation to the Joint Money Committees of the General Assembly, the governor made a revealing comment.

“Here in Virginia, we pride ourselves on being a low-tax state,” he said. Then, in the context of the tobacco tax, he added, “But it makes no sense to cling to the bottom of the rankings that costs us so much.”

“Cling.” Interesting word choice. At least Northam didn’t refer to taxpayers as “bitter” clingers.

It is true that Virginia has lower-than-average gasoline taxes and the second lowest tax on tobacco products. But the Old Dominion also had the 10th highest income tax collections per capita and 17th highest property taxes, according to the Tax Foundation based on 2012 data. Add it all up, and Virginia’s total state/local tax revenue as a percentage of state income ranked 27th in the country. That’s not a “low” tax state in my book, it’s a “moderate” tax state. Continue reading

Northam Spending Spree Update: $1.2 Billion More for K-12

Hoo, boy! Governor Ralph Northam has added another priority to his list of new spending initiatives: $1.2 billion in the next two-year budget for extra K-12 schools.

About two-thirds of that sum will go to “rebenchmarking” the state’s Standards of Quality (SOQs), or required inputs into public schools. Another $145 million will boost teacher pay by 3%, $140 million will be distributed to school districts serving large shares of low-income students, $125 million will go to “flexible funding” for school districts, “$99 million will increase the number of school counselors, and smaller sums will provide for for English-as-a-Second-Language students and school meals for low-income students, according to the Richmond Times-Dispatch.

Northam’s plan falls short of what the Virginia Board of Education had asked for, which would have amounted to $2 billion in extra spending, said the RTD. But the $1.2 billion proposal is massive by any other measure. It also follows new spending initiatives for Virginia’s historically black public universities, maternal health, early education, low-income housing, free community college tuition, and environmental quality. Continue reading

Early Budget News: Some K-12 Moderation

Well, it looks like the many forecasts of doom and budget profligacy on this blog were in vain.  According to this morning’s RTD, Governor Northam will be asking for an additional $1.2 billion over two years for K-12.  That is about half of the total cost of earlier projections of SOQ benchmarking costs and the additional money the Board of Education recommended. And it includes money for teacher salary increases, which was not included in the earlier estimates. It would seem that the Governor does not feel bound to go along with all the recommendations of his BOE.

The entire budget proposal will be released later today and the details will be available for poring over. Based on the newspaper report, the Governor may be proposing to roll into the SOQ some funding that was previously supplemental.  As I have commented earlier, that could be a concern.

— Dick Hall-Sizemore

The Mo’ Money Mountain Grows Ever Bigger

In his latest budgetary proposal, Governor Ralph Northam has proposed returning $733 million to Virginia taxpayers… Oh, wait a minute. I guess I misread the announcement. It seems he’s proposing $733 million in new spending to protect the environment and fight climate change.

That’s on top of advocating Virginia’s entry into the Regional Greenhouse Gas Initiative, expected to cost ratepayers multiple billions of dollars over the next decade; mo’ money for a preschool initiative; mo’ money for K-12 education; mo’ money to reduce maternal mortality; mo’ money for Medicaid; and mo’ money for the Virginia Retirement System. Meanwhile, his Secretary of Transportation is pushing for mo’ money for transportation funding, and he has yet to declare his position on the higher education lobby’s clamor for mo’ money.

There’s money for every Democratic Party constituency imaginable. That’s what you get with growing tax revenue and a statehouse controlled by Democrats. The one constituency getting muscled away from the feeding trough is the taxpayer. Elections have consequences.

And what are the middle- and working-class saps who pay the taxes doing about it? They’re mobilizing in defense of gun rights, getting rural and suburban localities to declare themselves Second Amendment sanctuaries.

What????? People, in the grand scheme of things, what is a bigger threat to your way of life? Restrictions on your right to purchase semi-automatic weapons… or higher income taxes, higher electric bills, higher gas taxes, runaway cost of college attendance, and out-of-control increases in the cost of health care? A few more years of going in the direction we’re going, and you won’t be able to afford to buy a semi-automatic rifle!

— JAB

Inmates Need Costly Medical Care, Too

by Dick Hall-Sizemore

In the most recently completed fiscal year, the general fund cost to provide medical care to Virginia prison inmates was $221.6 million.

That is a lot of money by any measure; it exceeds the entire budget of all but a few state agencies. However, despite its size, it does not get much public attention.

Like the state budget, medical costs threaten to consume the DOC budget.  The FY 2019 expenditures constituted more than 18% of the agency’s general fund budget. Each year, the budget request for additional funding for medical services is at the top of DOC’s list. Its FY 2019 appropriation for medical services exceeded its FY 2017 appropriation by $34.8 million. For the upcoming biennium, the agency has requested an additional $21.8 million in the first year and $28.3 million in the second year. Continue reading

This Little Piggy Went to General Assembly…

by James A. Bacon

With all the hungry piggies pushing for mo’ state money, the feeding trough is getting crowded. Besides the K-12 piggy (squealing for an extra $950 million), the Virginia Retirement System piggy (an extra $215.6 million), and the monstrous Medicaid piggy (the sky’s the limit — how much money do you have?), we can add the higher-ed piggy. A State Council for Higher Education of Virginia (SCHEV) report concludes that the Commonwealth’s public colleges and universities need an additional $212 million in the next biennial budget for operations and financial aid, and $826 million for capital outlays.

Here’s a breakdown of the operational funding needs: Continue reading

A Budget Cut that Should be Made

by Dick Hall-Sizemore

Just to show that I am not the “tax and spend” liberal that some people may think I am, I am proposing a significant budget cut for the Governor’s office to consider in its effort to satisfy all the demands it is getting for the upcoming biennial budget. That budget item can be summed up with one numeric phrase: 599.

Long-term observers and participants in Virginia government and politics, such as Jim and Steve, know immediately what I am talking about. The 599 program provides financial aid to local governments with police departments. The program’s appropriation for the current fiscal year is $191.7 million. Its name refers to its enacting legislation: HB 599, passed by the 1979 General Assembly.

The HB 599 program should be repealed and its funding used for more pressing needs of the Commonwealth. There are several reasons for this conclusion: The rationale for the program was flawed from the beginning; the underlying distribution formula is unknowable; and the funding cannot be tied to its original, ostensible purpose, the support of law enforcement. The remainder of this post will be used to substantiate these claims. Continue reading

The Game of Budgets

by Dick Hall-Sizemore

There is lot of wailing and gnashing of teeth going on in this blog and by the administration over the upcoming budget. Although there are some big-ticket budget items, that is nothing new; there always are. Even if the Democrats gain a majority in both houses, I don’t think there will be a tax increase. The doom-and-gloom scenarios don’t take into account a couple of issues related to revenue. First, the legislature last Session extended the sales tax to internet sales. Second, the legislature opted to conform the state’s tax code to the changes in the federal tax laws recently enacted by Congress.

Those changes, plus the good economy, are bringing in the revenue. The Secretary of Finance has reported that total revenues in September were $367 million more than the previous year’s September. On a fiscal year basis, general fund revenues to date are 8.2% higher than the previous fiscal year; the forecast was for an increase of 1.2%.  This additional revenue will not be available to the Governor and General Assembly for the crafting of the next biennial budget, but they portend a healthy increase in the revenue forecast for the next biennium, which can be used in budget development. Continue reading