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.

The budget presentation of the director of the Department of Planning and Budget had a bland redundant explanation for the appropriation: It was for “uncommitted contingencies that may arise over the biennium.” The Governor, however, had a more revealing explanation. In the preface to his explanation, he pointed out that “this is a time of change in the General Assembly. We will see new leadership with new priorities.” He went on to say:

Many of our shared priorities are reflected here in this budget.  But I also know that this new General Assembly will have its own vision.

“In the spirit of cooperation and good faith, we have set aside $200 million, to provide the new General Assembly with the flexibility to prioritize funding needs that they identify as important.

Northam seems to be trying to avoid having the General Assembly scrutinize his budget by saying, in effect, “Here is $200 million in Monopoly money for you to play with. Now leave my proposals alone.” As a consequence of this action, there is likely to be less pressure on money committee staff to look for weaknesses and waste in the Governor’s budget in order to “find” money for their members’ priorities.

The Governor made it clear in his remarks that this “spirit of cooperation and good faith” would not have been extended if there had not been a “change in the General Assembly.”

Not that they will not make use of this gift, but the General Assembly will have to do something with it. If legislators leave the budget proposal provisions untouched, the Governor will have an additional $100 million annually to spend in any way he pleases, with no conditions attached.

My soapbox: Although the Governor apparently could not determine a responsible way of spending some or all of that $200 million, such as for state employee salary increases, he should not have just handed it over to the legislature for its “priorities.” Rather, he should have proposed putting it into the cash reserve fund or allocating it to the Virginia Retirement System to help decrease its unfunded liability.

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10 responses to “Merry Christmas, General Assembly”

  1. Steve Haner Avatar
    Steve Haner

    I agree, that is the largest unexpended balance I can recall. And I suspect more will be available before the final decisions are made in February/March. State employee raises will be competing against low income tax relief.

    1. Dick Hall-Sizemore Avatar
      Dick Hall-Sizemore

      Northam went beyond leaving this as an unexpended balance. The money was appropriated as an uncommitted contingency. The distinction is subtle, but important. Revenue cannot be spent unless there is an appropriation. If this revenue were left as an unexpended balance, it could not be spent. As an appropriation, unless the GA does something, the governor would be free to spend it when the budget went into effect.

  2. LarrytheG Avatar

    Isn’t this a lot like throwing chum to sharks?

    1. Dick Hall-Sizemore Avatar
      Dick Hall-Sizemore

      I like that analogy!

  3. LarrytheG Avatar

    Is this to distract the sharks from his own proposals?


    1. Dick Hall-Sizemore Avatar
      Dick Hall-Sizemore

      That could be the intent. It certainly could be the effect.

  4. How about returning it to the people from whom it came?
    How about holding until the recession causes shortfalls?
    So easy to be grandiose with other people’s money.

    1. Steve Haner Avatar
      Steve Haner

      He is proposing some healthy additions to the reserves, too. As to returning it or using it for tax reform, that was on the table only until the election…..Lucy and the football.

      I also love the analogy of throwing chum to sharks. Will steal it at some point. 🙂

      1. There is a chum shortage (Virginia’s over-harvested Menhaden) guess now we know why.

  5. LarrytheG Avatar

    Money that is not recurring – probably should not be used to fund recurring budget items.

    so some of the budget items in Northam s budget are not recurring – like money going into rainy day – that’s purely budget-to-budget depending on what is available (or not).

    But money going to things like pre-school or other programs that will go on year after year – they should not be funded the first year with one-time money with no fiscal plan for the next budget year.

    That’s an argument that WILL influence progressives who also are fiscally conservative – yes they do exist.

    IN terms of “give it back” – I’d argue that if the money provides an important service – like universal pre school or opioid or mental services that it iS being “given back” especially if not having those services actually will generate additional tax burdens downstream.

    “investing” in govt budgets is NOT like investing in private sector commerce – no question because the “return” on such investment is not easily quantified is a bottom-line dollar amount.

    but make no mistake – each disadvantaged kid that grows up without a decent education IS going to impose costs on taxpayers… or not providing necessarily mental services may well lead to other taxpayer costs – “giving it back” is not just a money back to taxpayer proposition.

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