House Spots $170 Million in Unspent Balances

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.

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9 responses to “House Spots $170 Million in Unspent Balances”

  1. Larry Gross Avatar
    Larry Gross

    Interesting… Kaine asked the state agencies to identify 5% in cuts.

    Does this mean that the agencies identified a “different” 5% than the Republicans did?

    Why am I just a tad suspicious here?

  2. alohasteve Avatar

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  3. Anonymous Avatar

    It is not a different five percent. But when Kaine counted up the savings from the agency budget actions, he used only those amounts for FY 2008. Many started saving the money earlier, with several months left in FY 2007. Those are the funds that may or may not have been accounted for.

    Reading the background papers, apparently when the administration asked the agencies to save, it also promised to let them keep and carry over those savings into the new fiscal year. That is what the Republicans are arguing should be challenged — they are saying sweep those funds back into the pot to cover the general shortfall.

    The legislature looking for money hidden in agency balances is an old game that goes back probably to Governors P. Henry and T. Jefferson.

    This is way over the heads of most experienced capitol wonks, many of whom have never read a comptroller’s report in their careers. The voters are totally confused. But Wall Street will be looking closely now and the state’s reputation for honest and accurate fiscal accounting is nothing to fool around with. Somebody may be way out of bounds here — but absent the full data I don’t know who.

    I still think the best argument not to touch the rainy day fund is not that the rain hasn’t started, but that it still might — we are not out of the housing/credit crisis yet. This shortfall is nothing, but a real one might be just one revenue forecast away.

  4. Anonymous Avatar

    Are you hard-wired to the state Republican Party or what? Does the politburo tell you what to post?

    It’s just as bad as Fred Barnes op-eding Eric Cantor as the next best thing in the TD…I recall Fred Barnes telling us six years ago that Jim Gilmore was the next best think on the national GOP radar and then he fell apart,

  5. Jim Bacon Avatar

    Anonymous 7:41, Did you read all the way to the bottom of my post, or what? Did you see the update, which includes Kaine’s response to the GOP charge?

  6. Anonymous Avatar

    Jim Bacon,
    Does that mean your NOT hard-wired to the state GOP?

  7. Groveton Avatar

    $170M in “unspent balances”? So, basically they rooted around under the coach cusions and found $170M?

    And you wonder why I don’t want them holding $1,050 of my familiy’s money in their Rainy Day Fund.

  8. Jim Bacon Avatar

    Anonymous 9:21, Go back and read what I wrote about the GOP transportation funding plan, Abuser Fees, regional transportation authorities and support for electricity “re-regulation”. Somehow, describing the transportation funding scheme as “an abomination” is not what I would expect from someone who is A GOP lackey.

    I do happen to share the opposition to higher taxes and higher government spending displayed by *some* members of the GOP. Does that make me “wired” into the state GOP? Or does it mean that our principles happen to align on one particular set of issues.

  9. Larry Gross Avatar
    Larry Gross

    Partisan poop it is.

    Anyone, at any time, can go through the state budget and “find” things that can be cut.

    Typically it is done by folks not aligned with the Gov – regardless of whether he is a Dem or a Republican – that’s why it is partisan.

    But I have a bone to pick with the Republicans – who are SUPPOSED to be the party of smaller government and more efficient government

    so.. their BIG accomplishments in recent years are:

    1. partisan carping about gnat on butts type money

    2. abuser fees

    3. litmus tests for “no new taxes”

    4. pandering the immigration issue

    Where are the intelligent streamlined government ideas?

    Why not make THOSE better/bold ideas the mantra/platform?

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