The House of Delegates leadership has identified $170 million in unspent balances by state agencies, calling further into question the necessity of tapping the state’s Rainy Day Fund to address $641 million in revenue shortfalls this year.
Stated House Speaker William J. Howell, R-Stafford, and Vincent F. Callahan Jr., R-Fairfax, at a press conference today:
“It took just 30 days for the Kaine Administration to identify nearly $100 million in efficiency measures – things we should have been doing all along – to address slower, but still growing state revenues,” declared [House Finance] Chairman Callahan. “Shortly after the Governor announced his savings proposal last week, House Appropriations and Senate Finance Committee staff learned that the Administration’s plans did not reflect an additional $170 million in unspent balances, most of which will revert back to the General Fund.”
“These unspent balances – coupled with the as-announced $300 million in immediately curtailed spending already approved by the Governor – produce approximately $470 million in identified savings against the anticipated $641 million revenue shortfall. With each passing day, it is becoming more evident that using the Rainy Day Fund at this time and in this circumstance is clearly unwarranted.”
The House leadership simultaneously attacked on another front: noting that the Rainy Day fund “protects Virginia’s AAA bond rating.” Tapping the reserve fund for a couple hundred million won’t come close to jeopardizing the state’s gold-gilded bond rating this year, but it is an interesting rhetorical gambit. Gov. Timothy M. Kaine joined former Gov. Mark R. Warner and other Democrats in using the pretext of a bond rating downgrade to justify a tax increase in 2004. If the AAA bond rating was sacrosanct then, how come it isn’t now?
Kaine can probably provide a plausible explanation of how “it’s different this time,” but the House’s rhetorical thrust does put him on the defensive. It will be interesting to see how he responds to the House’s latest sally.
Update: As promised, here is Kaine’s response, through his spokesman Delacey Skinner (as reported by Warren Fiske with the Virginian-Pilot). Skinner called the Republican charges spurious, concocted to create an issue for the Nov. 6 legislative elections.
“If they had been paying attention to the budget instead of being so focused on campaigning and hurling political grenades, they would have heard that these balances are already part of the governor’s plan,” she said.
Skinner said Kaine counted on carrying over $166 million from the last budget year to this one. Kaine said in a news release last week that he planned to use “unspent balances” to help address the shortfall, but did not put a dollar amount on them.
