Stupid Politician Tricks

Image credit: The Commonwealth Institute

In recent years Virginia legislators have relied increasingly upon “an array of budget gimmicks, accounting sleights of hand, and one-time deals” to balance the budget, contends the Commonwealth Institute in a new paper, “Shell Game: Virginia Balances its Budget with Cuts and Accounting Sleights of Hand.”

Authors Sara Okos and Michael Cassidy have made the same point before, although they buried it in reports on broader topics. In this policy brief, they throw the spotlight on the subterfuges that politicians adopt to “balance” the budget at the expense of the commonwealth’s long-term fiscal health. Most of these tricks will be familiar to regular readers of Bacon’s Rebellion because we have castigated them as well. Still, it’s helpful to line them up all in a row just to see how many scams the politicians have been pulling on citizens and taxpayers.

The 13-month year trick. In 2010, the General Assembly required large retailers to estimate their receipts for the first month in the following fiscal year and send in the sales tax payments early. Presto change-o, 13 months of revenue in only 12 months for a pick-up of $27.7 million. But those revenues came at the expense of revenue in later years. The legislature is still unwinding this gimmick.

I’d gladly pay you Tuesday for a hamburger today. In 2011 the General Assembly allowed the McDonnell administration to accelerate previously authorized bond sales so the state could borrow at low interest rates and build roads while bids were low. But much of the money, proceeds from the s0-called GARVEE bonds, was borrowed against future federal transportation grants. Thus, much of the spending today comes at the expense of spending in the future.

Borrowing from state employees. In 2010, the General Assembly deliberately underfunded the Virginia Retirement System below levels recommended by the system’s actuaries. Writes CI: “This included delaying or suspending a whole fiscal quarter of contributions for state employees and teachers.” The state is in the process of paying that money back. But meeting those obligations comes at the expense of pending in other areas.

One-trick pony. Last year the federal government reached a $25 billion mortgage settlement with five of the nation’s largest loan services, resulting in a $65.9 million payment to Virginia. Only $7 million went into the state’s Housing Trust Fund. The rest of the one-time settlement will be used to meet education costs related to inflation, retirement and the Virginia Preschool Initiative.

A bit unfairly, the report recounts other gimmicks that the General Assembly rejected, such as abusive fees for reckless driving and similar offenses, which it passed and then repealed, and Gov. McDonnell’s unsuccessful effort to sell the state’s liquor stores to raise money for transportation projects. We shouldn’t blame lawmakers for tricks they pondered and then rejected. The hocus pocus they actually did engage in is grounds enough for outrage.

CI’s conclusion:

The gap between the resources we need to support our modern and growing state with a booming population and growing demands for roads, sewers and other infrastructure has created annual budget shortfalls for more than a decade. Yet the state has ignored the problem, imagining we can cut, borrow and contrive our way to prosperity. Lawmakers have played games with existing resources in a desperate move to avoid talking about real solutions to our revenue problem. That kind of shell game is unsustainable.

My big problem with this conclusion is that CI implies, without coming out and saying so, that the “real solutions to our revenue problem” entail higher taxes. No, the solution is fundamentally re-thinking the way we deliver core services such as K-12 education, higher ed, transportation and health care. But one thing we do agree upon: Our current path is reckless and unsustainable. Something has to give.


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  1. DJRippert Avatar

    I think you are hyper-sensitive, Jim. I read the CI report as an attack against opaqueness and obfuscation. While higher taxes are more easily understood than changes in human settlement patters, I see the CI report as demanding more visibility than demanding higher taxes. However, having said that, I would agree with the CI that higher taxes are more likely to solve fiscal problems than some experimental societal programs that have never been implemented anywhere else.

  2. ” My big problem with this conclusion is that CI implies, without coming out and saying so, that the “real solutions to our revenue problem” entail higher taxes. ”

    then what is your opinion of those who agree with you but then go ahead and fund these things with “tricks”?

    isn’t that DOUBLY hypocritical?

    If you claim to be a conservative, a fiscal conservative and yet you engage in budget tricks to fund things that at other times you claim should not be funded anyhow then wouldn’t you have to consider those people as having totally corrupted principles?

    I mean at least the Dems say we need to increase taxes for transportation while the GOP plays stupid budget tricks – and when pushed – says we are wasting money on transportation anyhow that we don’t need more taxes but smarter “investing”.

    that’s the kind of double-talk that passes for fiscal conservatism these days. folks that do this have no scruples.

  3. If you dislike stupid political tricks – you should play particularly close attention to the way Ryan proposes to “balance” the budget – and I don’t think Romney is much better.

    Jim B has already said that he realizes that you cannot balance the budget by cutting entitlements alone but that’s pretty much exactly what Ryan and Romney are proposing.

    At least in Va – the fact that the budget must balance each year limits just how much chicanery can be engaged in – AND it is more obvious and transparent and most important – claims that the budget can be balanced ONLY with CUTS is obviously not as feasible as it sounds.

  4. Andrea Epps Avatar
    Andrea Epps

    I need to be careful here because the whole issue with the mortgage settlement makes me so mad my blood pressure goes up. I’m sure my opinions on the paper will be predictable after I read it. But when I saw the settlement paragraph…never mind.

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