Yes, Virginia . . .
We do have a budget, but dipping into VRS is cause for concern
March 17, 2010
A day late and, in our view, some $620 million short. But Virginia, facing a $4.2 billion shortfall, managed to close the budgetary gap. And the General Assembly achieved said balance without having to raise taxes statewide — something for which all residents should be happy during this time of economic uncertainty and, for many, woe.
Still, the manner in which this was accomplished hardly sits well — and that’s where that $620 million comes in. No matter how defenders of this move care to spin the stratagem, it still comes down to this: The money was taken from the Virginia Retirement System.
Yes, the cash must be paid back (starting in 2013) and with interest (7.5 percent over 10 years). But, as state Sen. Jill Holtzman Vogel said, in explaining her “No” vote against the final version of the budget, this “raid” on the VRS sets an alarming precedent.
“In my view,” Mrs. Vogel wrote in her final Legislative Update, “this use of VRS monies . . . raises grave concerns about the stability of our retirement fund and our commitment to teachers and state employees. Additionally, credit agencies evaluate VRS as a means of establishing Virginia’s bond rating, which could place our triple-A bond rating at risk.”
In other words, the freshman Mrs. Vogel sees, as perhaps more seasoned Senate hands do not — Walter Stosch, please call your office — that such a move on the part of the Legislature amounts to risky business. Walking a fiscal tightrope, as it were, hoping and praying another economic ill wind doesn’t sweep through the markets, thus endangering Virginia’s high-wire act.
Budget-writing, in any General Assembly session, entails trade-offs. Even in dire economic times — and perhaps especially in such times — politicians seek to minimize pain. But some pain, in the form of sharp and penetrating budget cuts, was inevit-able from the start, once Republican lawmakers, taking their cues from incoming Gov. Bob McDonnell, resolved to attain constitutionally mandated balance without raising taxes.
This was a major plank of Mr. McDonnell’s highly successful campaign, and we deemed it then, as we do now, a good one. Increasing taxation during recessionary times is, plainly and simply, as wrong as it is economically counterproductive.
So the Assembly was left with this alternative: to cut, or cut even more. It chose the former, opting to make up the difference by raising a few fees (court and recordation levies) totaling $95.4 million and by dipping into VRS. By doing the latter, lawmakers believed they could offset even deeper cuts, originally envisioned in the final budget plan offered by outgoing Gov. Tim Kaine, to core services, especially K-12 education.
On this latter score, they were right. Core services were spared deeper pain, much to the relief of officials obliged to provide these services. Clarke County Sheriff Tony Roper, whose office stood to lose three full-time positions as the result of an anticipated 22 percent reduction in state funding, perhaps spoke for many when he said, “We did pretty well, all things considered.” Translated into dollars and cents: a 6 percent cut in state funds rather than 22 percent.
Good, or at least better, news for such agencies, but at what potential cost to the state as a whole? Only time and economic conditions will tell. Virginia faces a testy trip on the tightrope.
VRS ‘raid’ key issue in her ‘nays’
March 08, 2010
Late last month, the state Senate approved its version of a biennial budget whose critical element is resolution of a $4.2 billion shortfall. On Wednesday, the Senate decided to reject House budget amendments and formally send its spending blueprint to a joint committee of conference. Both tallies were identical, 30-10. Sen. Jill Holtzman Vogel, R-Upperville, voted with the minority both times.
During an extended interview Thursday morning, Mrs. Vogel admitted feeling “guilty, in a way,” about these votes, particularly the second one.
“I’m very proud of the Senate,” she said, noting its approval of a budget without a “$2 [billion] to $3 billion tax increase. There was no way the people would support that . . . But, on the flip side, I had some concerns that, had I voted the other way, I would have trouble looking folks in the eye.”
Foremost among these concerns was an effort to balance the budget on the backs of state employees and pensioners. Borrowing — or, as she said, “raiding” — $500 million from the Virginia Retirement System sets “a terrible precedent.”
Her bottom line: “I just couldn’t vote to underfund [the VRS]. You don’t borrow money like this to pay for bread and milk.”
What’s more, as Mrs. Vogel wrote in her weekly legislative update a few days earlier, “Mortgaging that fund undermines the integrity of the retirement system which credit rating agencies consider when establishing our bond rating, meaning we place our triple-A bond rating at risk.”
Mrs. Vogel also took issue with the Democrat-controlled Senate’s educational priorities, specifically its elevation of Virginia’s pre-K program — a treasured legacy of former Gov. Kaine — at the expense, in her view, of K-12 funding.
“I’ve yet to hear any educator I’ve talked to say that’s more important,” she said. “They’d rather have the money in K-12.”
Mrs. Vogel also had reservations, as she noted in her weekly update, with “a multitude of new fees and fee increases” in the Senate budget.
If she were a conferee, Mrs. Vogel would hone in on priorities — “K-12 education, social services, public safety, meat-and-potatoes stuff” — while calling for the elimination of “the many extraneous programs that are still around.”
She realizes that once the conferees gather, considerable horse-trading ensues — i.e., “folks fighting to put things back in” the budget. Given the chance, she would make the case, as the Senate has, for retention of arts funding so critical to tourism and local economies, particularly here in the Valley.
Still, for all the horse-trading sure to come, Mrs. Vogel is “cautiously optimistic” that a budget can be hammered out on time, by the end of next week. One reason: There are “no chasms,” no huge overriding — and divisive — issues separating the state’s solons.
“This sort of unanimity, it was the result of the election,” she said. “The people said, ‘Please don’t raise my taxes, not this year.’ We all understand that.”
Another reason for Mrs. Vogel’s optimism is the “inclusive” approach taken by Gov. McDonnell, which will be the subject of Monday’s editorial.
Lieutenant Governor, Legislative Leaders Urge New Course on Health Reform
Leaders Express Disappointment with Health Care Summit
March 01, 2010
PRESS RELEASE - Campaign For Responsible Health Reform - Andy Poarch (804) 648-6299
Richmond, VA - Virginia Lieutenant Governor Bill Bolling, State Senator Jill Holtzman Vogel and Delegate Scott T. Garrett commented today on the proposals discussed at the recent White House Health Care Summit. As part of their comments, the Lieutenant Governor and lawmakers expressed disappointment that the proposals mirrored the irresponsible legislation passed by the House and Senate and that legislative leaders failed to agree to start over on health care reform.
“I am disappointed that the White House and majority leaders in Congress did not take this opportunity to chart a new course on health care reform that leverages areas of broad agreement and relies on common-sense solutions to reducing the cost of health care,” said Lieutenant Governor Bolling. “Instead, they continued to advance ideas that would result only in additional taxes on Virginia families and businesses, deep cuts to Medicare and new funding burdens on Virginia taxpayers as we struggle to bridge a $4 billion state budget deficit.”
The Virginia Campaign for Responsible Health Reform identified several areas where Congress and the White House should find agreement and enact common-sense reforms, including cutting down on waste and fraud, creating new pooling options for small businesses, relief for individuals with pre-existing conditions, and medical liability reform.
“The White House proposals, which are cribbed from the House and Senate bills firmly rejected by the American people, will not achieve the stated goals of making the health system sustainable or stabilizing the budgets of the federal government and American families,” said Delegate Garrett (R-Lynchburg). “At a time when our economy is still in turmoil, plans for trillions of dollars in new health care spending paid for by taxes on middle class families and small business will be devastating, and they will still fail to reduce the cost of health care in America.”
“While I agree with the President’s statement at the White House summit on health reform that we must look for ways to lower the cost of health care, we can’t achieve this goal with legislation focused on penalizing small businesses and individuals,” said Senator Vogel (R-Winchester). “We need to increase access to health care by reducing the cost of health care, and that is the place where Congress should be laser-focused instead of how the federal government can impose control on the health care of Virginians.”
For more information, please visit the website www.responsiblehealthreform.com.