Is McDonnell All that Bright?

Robert F. McDonnell has found his pots of gold. He even looks like a leprechaun.
An audit of the Virginia Department of Transportation shows more than $1 billion in unspent money, allowing the Republican governor to crow about government mismanagement and toss some dirt the way of his predecessor, Timothy Kaine, who happens to be head of the national Democratic Party on the eve of important midterm elections.
In announcing the results of a 150-page audit by the Richmond accounting firm of Cherry, Bekaert and Holland, McDonnell bemoaned that the money was sitting around while average Virginians were sitting around in congested traffic. Kaine responded that squirreling away nearly six months worth of rainy-day money reflects prudence, not incompetence, on his part.

Therein lies a curious flip-flop in values.

McDonnell very much wants to position himself for future office as a tight-spending, ultra-frugal, anti-government politician. He came into office with a script, written by Republican governors in states such as Michigan, as a streamliner, reformer and privatizer. But the VDOT audit shows a few inconsistencies:
  • If Kaine put away that much — perhaps, too much — money, doesn’t that show that a Democrat can be frugal, too? Do the Republicans have a lock on budget discipline? They sure talk that way. Of course, that’s forgetting Bill Clinton’s surplus and George W. Bush’s free-spending ways.
  • If there are more than a billion unspent bucks in VDOT’s budget, why is there such urgency in selling off the state’s ABC stores, presumably to get desperately needed money for the state’s roads? Or is the ABC plan, which has plenty of quirks and critics, just another complex effort to give McDonnell some kind of legacy?
  • Where is the windfall going to go? It could be that it ends up as the state’s cash portion for a big privatization project to build a new superhighway from Interstate 95 in Petersburg along U.S. 460 to Tidewater. But shouldn’t it go to filling potholes and general maintenance that many of the state’s highways so badly need? U.S. 460 is McDonnell’s pet project and he needs state cash to make it work.
In any event, Kaine is drawing criticism for being too frugal. That’s a strange charge coming from a limited-government Republican.
But the entire investigatory nature of McDonnell’s campaign against government is somehow sounding a sour note. What it has turned up is that his Democratic predecessor may have put too much in a rainy day fund. The audit found no evidence of fraud.
Only nine months into his term, McDonnell has had his share of missteps, from offshore oil drilling to forgetting about slavery to being overshadowed by aggressive, hard-right attorney general Kenneth Cuccinelli. He really wants to be seen as a reformer. Being inconsistent about his philosophy won’t help him.

This raises another point about McDonnell, given all the contradictions. It may very well be that the guy just isn’t that bright. He’s certainly not a very good politician. He never seems to be ahead of the curve. He’s always putting himself inadvertently in positions that he can’t control. Say what you want about Cuccinelli, but he does seem to be setting agendas rather than reacting to them.

Lt. Gov. Bill Bolling is trying to set himself up as McDonnell’s successor in the very Virginian traditional approach that dates back to the Byrd Organization days. In this, he has some support in some corners, such as the perennially out-of-touch Richmond Times-Dispatch that still is more than a half a century behind the times. Cuccinelli has made nosies he may challenge Bolling for the Republican nomination.

It could be that McDonnell has already become a has-been governor.

Peter Galuszka

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16 responses to “Is McDonnell All that Bright?”

  1. Let me get this straight … despite promising 13 times during his campaign that he would not raise taxes Mark Warner almost immediately raised taxes. Then, after two failed attempts to raise money for transportation – one unconstitutional transportation bill and a wildly unpopular abusive drivers' fee law – Kaine surrendered on doing anything to improve transportation in Virginia.

    Now we find there is a "spare" billion dollars in VDOT?

    And you think McDonnell is simple because he's mad?

    I'm livid.

    I DO NOT want the Commonwealth of Virginia acting as my stockbroker. I DO NOT need Mark Warner raising taxes so that Tim Kaine can hide the money in some slush fund.

  2. Gooze Views Avatar
    Gooze Views

    SO why privatize ABC? Is the rationale a tad screwed up? And what about Democrats actually being stealth skin flints. I thought that's what all you right wingers wanted.

    Peter Galuszka

  3. Anonymous Avatar

    The "one" fired was former commissioner Ekern.

    Not really a firing – almost a given for the commissioner to go when the administration changes.

    Note p. 121 of the report – the Central Office bureacracy that everyone is crying about FAILED to fulfill their downsizing thru the blueprint.

    So all of the field services to local governments, residencies, and 1,000 employees went – but the self-confessed problem, to include executive leadership, remained it place.

    Conspiracy? Perhaps…..

  4. "I DO NOT want the Commonwealth of Virginia acting as my stockbroker. I DO NOT need Mark Warner raising taxes so that Tim Kaine can hide the money in some slush fund."


    And yet you expect the commonwealth to be fiscally responsible. I have a slush fund that I put aside in good times against the time when I might not have enough revenue. I expect the state to do the same, instead of squandering it on feel – goods.

    But I expect the state to be transparent about it, and I also expect conservatives not to go ballistic over it.

    Since none of that is going to happen, I'd just as soon the state let me keep the money.

    Same conclusion as Groveton, different approach.

    Problem with this answer is that now you have wild swings in revenue and expenditures that make planning much harder. then the Conservatives have another chance to rail against government for being so stupid in planning..

  5. Peter:

    First, I don't accept Democrats as skin flints when one Democratic governor raises taxes so that another Democratic governor can hide a billion dollars. That's a lot closer to dishonesty or theft than to frugality.

    As for the ABC stores … I would much rather the state own and operate the roads and privatize ABC than the other way around. I don't want the state to be my stockbroker or my bartender. However, given the importance of eminent domain and the necessity of transportation for economic growth, I would like the state to operate a competent road system. Apparently, they can't do both. Perhaps selling off ABC will give them more time to attend to transportation. For example, not losing track of a billion dollars.

    Hell, I'd be perfectly happy if McDonnell took the billion and gave it back to every Virginia taxpayer in proportion to what they paid in taxes. He could send a letter along with the checks saying, "I am sorry that the last governor misplaced $1B of your money. Since the state government is obviously too inept to even keep track of the money you send us we have decided to give the money back to its rightful owners – the taxpayers.".

    They needed an outside audit firm at a cost of $420,000 to find $1B they "lost"? Un – freakin' – believable.

    The only good news is that Tim Kaine is now free to use his superb management skills on behalf of the national Democratic Party. I am sure they are thrilled to have such a sage at the helm.

  6. Philosophically, I don't think government should be doing things PE can do well, like running retail stores.

    But if the state is going to get out of the liquor business they neeed to be real about what this is going to cost. The windfall is not a windfall but it is a downpayment against a future lost revenue stream. We know what the revenue stream is, so we know what and equitable payment ought to be.

    That decision is INDEPENDENT of any other coonsideration like future taxes from liquor sales.

    If a business sells an asset, it does so because it can invest the money in something else that provides a better cash flow. Since Groveton objects to the state having an invested endowment which might lower taxes: doesn;t want the state as a stockbroker, the state has to invest in itself.

    So, use the Liquor money to invest in roads, since you are not allowed to put it any place else. This is only rational if you think roads provide a better ROI than liquor. If that is the case we should be eager to invest in them and not hold the Baconesque view that the users should pay for them.

    Or take Groveton's approach. The state should not be investing in liquor stores on my behalf. I can do better by myself. So sell the liquor stores and refund the money to citizens. The state will then have no liquor stores and no revenue stream spo it will have to raise taxes to replace the revenue stream. (One of those taxes would be the "new" tax on private liquor stor sales, so that portion is a wash.) gbut for the rest the question is whether most people can actually invest their share of the liquor store sales in such a way that their return on investment is higher than the new taxes they will have to pay.

    I would think that is a bad bet, for most people.

  7. Look what happened in Maine. They leased their liquor stores and goat a big chunk of cash. When the lease expired they put it up for auction and got an even bigger chunk of cash.

    In fact they got something like ten times as much money as McDonnell would have gotten, with something like one seventh the population.

    The Maine experience shows the utter stupidity of what McDonnell was trying to do. At leas t at the price PE was willing to pay.

  8. Bottom line is Maine got a LOT more money AND they still own the liquor stores. Private enterprise gets to participate (oddly enough by bidding for th eright to operate a monopoly), and everyone ought to be happy.

  9. I think the state should confiscate all restaurants, bicycle shops and barbers so they can operate them at a profit. In fact, why doesn't the state just own all the businesses? Taxes would be really low.

    Even Raul Castro has been privatizing state owned businesses in Cuba. Even Castro knows that having the state own barbershops is a bad idea.

    What will it take to get Virginia's Democratic politicians to the same level of capitalist thinking as Raul Castro?

    As for whether the average person could invest the money from the ABC sale better than the state … hey Hydra – the state just admitted that it lost track of $1B. They can't even effectively count the money let alone invest it.

  10. What was he supposed to get for the liquor store sale $360 million? what is that, $50 per state resident.

    As the Maine experience shows, the idea was a joke. There wasn't near enough moeny in it, and the deal concentrated attention on the retail stores when the real action was at the wholesale level where a few well connected companies could clean up.

    I don't have a problem with Virginia getting out of th eliquor store business. I have a problem with the state "selling" something they never "owned" in the first place, in the sense that they never bought it. This was a business created by fiat: by regulating everyone else out of it.

    The same thing is wrong with downzoning someone with no payment and then 20 years later expecting proffers or bribes to get the former zoning back.

    As for losing moneny or losing track of it, do you think for a second that this could happen if the states books were open and trnasparent. There wpould scores of amateur auditors poring over the books – for free. This is just a matter of sunshine.

    Sunshine is necessary, because even if the states books were perfect, and no set of books is, there would be people fulminating conspiracy theories and pointing fingers in the dark – because there would be no public way to refute them.

    Harvard is a huge bureaucracy, and they seem to manage their endowment well. I see no reason why the states cannot operate the same way. If we are really concerned about the legacy of debt we leave our children (ignoring the legacy of benefits we leave them) then why not plan on a fully endowed state?

    If everyone added 5% to their tax bill earmarked for the endowment fund, then in a hundred years we could do away with taxes.

  11. It is hypocritical to demand we pay not one cent extra for government and then be concerced about the legacy of debt weleave our children because one way we spend less (currently) on government is to borrow the money. The other thing we do is defer needed tasks, which is simply a different form of debt we hand to our children.

    Much of the economic growth and wealth we enjoyed from the 60's to the 90's was built on investments made by our forefathers. But we seem unwilling to do the same for our progeny. By not making those investments now, we doom them to decades of stagnation, which they can ill afford in a new global economy.

  12. Anonymous Avatar

    Is no one else concerned that the same VDOT leadership that masterminded this mess is still in place ?!?!

    That of all of the down-sizing mandated by those folks, the only piece of it that did NOT get done was their own ?!?

    They pulled the epic 'dupe' on EVERYONE this time….. and are still there to do it again, unaccountable even when the audit catches 'em doing it.

  13. ya'll need to read the actual audit.

    here's the summary:

    here's the full (150 page) audit:

    and what you will find is this

    that under Kaine – VDOT was significantly downsized in response to major losses of VDOT revenues due to the economy crashing.

    more relevant:

    until 2006 – VDOT district offices did not "sit" on money – and be advised that this is MAINTENANCE money…

    from that point on – there were major cuts to funding and the district offices were holding back on spending money on particular projects until the fiscal picture got more clear.

    It was a kind of triage where they did not want to commit money to one project if it meant another one got none.

    It was in this environment tha the money got held back.

    it did not affect road construction because there is no money for that because, by Code in Va – Maintenance must be covered FIRST.

    So folks..this is NOT – FOUND MONEY – that's totally a bogus claim.

    This is money that has to be spent on maintenance and the only effect of holding it back – is that some maintenance projects have been delayed.



    DECIDE for yourself instead of listening to the "spin".

    and the bottom line here:

    It's EXACTLY what Warner and Kaine told you YAHOOS:

    There is no free lunch on transportation and when you don't increase the gas tax for 25 years nor index it to inflation – you will have no money for construction which is where we are at right now.

    Ask yourself this also.

    The Gov – he did not fund the state pension fund this year – that's an unfunded liability – usually illegal for Corporates and since he did not budget that – he ended up with a Surplus – a BOGUS Surplus because he basically incurred debt in doing it – a practice we are seeing more and more with Republicans who say they are fiscal conservatives but when the pedal hits the metal – they flinch.. they avoid the hard decisions and they LIE about it.

    If McDonnell was dealing from a full deck – he'd take the ABC profits and PAY BACK the pension fund – now wouldn't he?

    and one time payments to VDOT is NOT THE SAME as sustainable funding of VDOT – which you are NOT going to get from this audit either.

    The "found" money is ALREADY DEDICATED to maintenance – not construction.

    The only result of not spending this money is maintenance backlogs – that need to be caught up.

    McDonnell is turning into a smoke&mirrors Gov who is playing stupid accounting games rather than confronting the realities.

    Read the Audit – folks.

  14. Another thing identified by the Audit is that Va is using Federal Funds that were designed for new projects – for maintenance – because the state revenues no longer cover maintenance.

    The problem with this is that the Feds have mandatory reporting requirements on the money no matter whether it is used to build a complex interchange or repave an existing interstate.

    This slows things down and is identified in the audit as a problem – but I never say in the audit a breakdown of the funds not spent in terms of their sources – State or Federal.

    The GERMANE point is that money for construction is NOT BEING HELD BACK – this is money for MAINTENANCE and it cannot be used for other purposes unless you are not going to use it for maintenance – which would – essentially violate the law in Va which says that all maintenance work must be funded first and any left over funds can be used for improvements.

    The bottom line is that we are out of money – just as Warner and Kaine told us we would be

    VDOT is essentially out of the road building business and is a maintenance agency now.

    And that will be it's future unless a sustainable source of funding is established

    just as Warner and Kaine said.

    We are not going to build roads in Va by "squeezing" out inefficiencies in VDOT – because folks.. the agency is one of the most efficient in the country to start with and has already been downsized from 10,000 employees to 8000 with a goal of 7500.

    if you do the math that's about 75 VDOT workers per county.

    Think about your county and the work done in support of maintenance and operations.

    Compare that 75 employees to …for instance, your schools, or your law enforcement or even your county administration.

    Many of these employees are contract monitors as much of the maintenance is contracted out and think about what happens when we get snow like we did last winter and you NoVa tops were hollering at the top of your lungs about "poor service".

    no free lunches.

    McDonnell is doing a terrible disservice to the problems.

    He's not telling the fundamental truth about VDOT finances and worse.. he's AWOL on what to do about sustainable funding sources for VDOT…

    and if you want blame for the plans to toll 1650 miles of road in the DC Area – start with McDonnell who refuses to tell the truth about VDOT funding.

  15. Here's what McDonnell has the responsibility to do.

    He does not have to advocate higher taxes as THE solution to Virginia's need for new infrastructure to serve the economic growth of the state.

    He does not have to propose what Warner and Kaine did.

    But what he DOES have to do is demonstrate leadership in how we should go forward for funding transportation infrastructure in Va.

    Blaming VDOT for hold back money is not leadership.

    Trumpeting one time money from the sale of ABC is not leadership.

    What is McDonnell's blueprint for leadership?

    should we have more toll roads?

    should counties be allowed to tax for new roads?

    should counties be made responsible for local roads like all of Virginia's cities and towns and 2 counties and 46 other states counties?

    He actually is in a position to show us how to go forward WITHOUT raising taxes but he also has the obligation to show us how.

    So far, the man is smoke&mirrors – which is the usual Republican response to things that Dems say we need to raise taxes on – and the Republicans play games and don't address the problem.

    Address the problem, Gov.

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