Super Bowl Budget–A $63 Billion Warner Win!

Callahan and Chichester signaled Sunday a new, revisionist $63 billion state budget in the near-making that will spend most of a billion dollar surplus on one-time items and give Virginia Governor Mark Warner a second consecutive high-profile legislative victory as his tenure draws to a close. Says the Associated Press of the House and Senate versions: “…both plans are fundamentally similar to the Budget Gov. Mark Warner introduced in December in that they largely avoid programs that obligate the state to pay for them year after year.” The two positions will undergo relative minor ‘cut and paste’ fit revisions over the next two weeks. Final negotiations will produce identical documents by adjournment, scheduled for Feb. 26. Warner won’t win in all the details–he’ll be nicked here and there in some of the line items–but despite some spin to the contrary, particularly on the House side, look for most impartial observers to call it a major victory for the governor, even as details emerge. Among them: Food tax cut (you can forget that car tax thing); big block of the surplus into one-time transportation items; raises for state employees. Side bet: message morphing will be: “We’re not going to raise taxes!” (Just a tad different from ‘We’re going to cut your taxes.’)

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  1. Barnie, good post. But, I have another spin. Maybe I’m naïve, but such an outcome could easily be seen as a victory for low-tax, limited government Republicans. Look at it this way: Virginians get their deserved “food tax” cut–brought to you by the Republican-controlled legislature. Plus, Republicans still get to run on eliminating the “car tax” in the future (if it doesn’t pass this time around as you suggest).

  2. Phil Rodokanakis Avatar
    Phil Rodokanakis

    And, of course, the fact that Warner has been lying to the voters for four years straight, will be ignored by a sympathetic liberal press.

    Warner lied to get elected, he lied when he said he would not raise taxes, he lied when he said he cut $6 billion from the State budget, he lied when he said that the State needed to raise taxes because we were facing a deficit, and so on and so forth…

    When it comes to the budget and taxes, Warner has taken a cue from the lier-in-Chief and operates on the principle “it depends what your definition of is, is!”

  3. Barnie Day Avatar
    Barnie Day

    John: ‘Cold Fusion’ Budgeting: Spend your way to savings!

    Phil: I see you’ve got issues. Are you taking anything for it?

  4. Will Vehrs Avatar
    Will Vehrs

    Yes, this will be a “win” for Warner. He was on NPR this morning with Juan Williams, the thrust being that he is poster boy for a Democratic Governor succeeding in a Red State. This cements the narrative.

    Of course, this situation is why Virginia will never have a two-term Governor. The legislature just can’t compete.

  5. Just so everyone knows, here are the budget numbers from Warner’s years (source: State budget websiteFY2002: $23,483,212,825
    FY2003: $24,982,910,876
    FY2004: $26,379,372,090
    FY2005: $28,517,803,716
    FY2006: $29,691,827,988 (projected)

    Here are the increases:

    2002-> 2003: 6.4%
    2003-> 2004: 5.6%
    2004-> 2005: 8.1%
    2005-> 2006: 4.1%


    Compare that to the Gilmore years:

    FY1997: $17,131,110,511
    FY1998: $17,620,703,141
    FY1999: $19,962,082,932
    FY2000: $21,368,967,256
    FY2001: $23,322,749,017


    1997->1998: 2.9%
    1998->1999: 13.3%
    1999->2000: 7.0%
    2000->2001: 9.1%

    Just saying…

  6. Barnie Day Avatar
    Barnie Day

    So Warner’s budgets have increased, on average, 6.5%, while Gilmore’s increased, on average 8.08%? And the moral to this story is?

  7. Jim Bacon Avatar

    The first moral of the story is that state spending increases faster when the economy is booming than when it’s working its way out of a recession.

    The second moral is this: State bean counters count state reimbursements for local car taxes as “spending.” And the bulk of that “spending” increased on Gilmore’s watch.

    I’m no fan of the car-tax phase-out–I’ve criticized it on many occasions–but I can see that “spending” that puts money back into the hands of taxpayers is qualitatively different from spending that increases the size and scope of government programs.

  8. Barnie Day Avatar
    Barnie Day

    Excellent point, Jim. I agree that the car tax reimbursement should not count, nor be thought of, as ‘spending’, anymore than we would count income tax refunds as ‘spending.’ I simply had not thought of it in that context before.

    I read somewhere once an economic theory that comes to mind now: If we divided all the money in the world up among all the people so that each of us had an identical amount and then turned the process loose again, then the folks who have it all now would have it back in three years. What think?

  9. Jim Bacon Avatar

    That’s a fascinating scenario to think through. Yes, I do believe that society would quickly sort itself out between economic winners and losers, though I doubt the world would get back to the way it is in only three years. Give the process 20 years!

    Different people have different skills and aptitudes, and they have different priorities in life. Dudes like you and me, we obviously would spend more time thinking the heavy thoughts than accumulating massive amounts of money. We just aren’t motivated to get “rich.” Other people are so motivated. I have no problem rewarding them because they create the technological and material bounty that makes life better for most of the rest of us.

    On the other hand, if you redistributed everything, it would level the playing ground for at least a while. Wealth and privilege certainly uses its power, particularly in the realm of politics and legislation, to perpetuate its wealth and power. Think of all the special interests that have stacked the deck in their favor through subsidies, tax loopholes, corporate welfare, etc. Sweeping all of that away would make things more egalitarian… for a while… until people emerged with more money, and more power, than everyone else and began manipulating the political system to their advantage.

  10. Ha – interesting.

    I guess my point was that Warner’s spending isn’t really out of the ordinary.

    I’m curious though – does anyone know where all of that money went? I know college funding decreased massively until it leveled off this year…what received the big increase?

    Here’s college funding (I’m having fun with the state budget website):

    FY2001: $1,494,636,572
    FY2002: $1,522,143,877
    FY2003: $1,297,645,701
    FY2004: $1,221,690,292
    FY2005: $1,360,565,498
    FY2006: $1,425,076,124

    Those were General Fund numbers (money appropriated directly to colleges and universities). Non-general fund money is made up of tuition and private donations. Tuition recently increased a bit and that helped offset the cuts. FYI: The largest beneficiaries of the recent funding increases were Virginia Community Colleges and George Mason.

    So who received the Warner spending increases?

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