How Much Have We Lost?

Sunday, December 20, 2009

Evaluating Govenor Kaine's 2010 Budget

I haven't fully reviewed Governor Kaine's 2010 Budget yet, but I have read some briefings about it, some new reports, and I've skimmed some the materials on the state website here. The Governor is not in an enviable position, but I also believe that some parts of his proposal are seriously flawed.

I wrote about what was coming in my post two weeks ago in my post entitled Train Wreck or Day of Reckoning? The budget situtation is really ugly.
  • State revenues are decreasing to around 2005 levels.
  • The General Fund revenue decline is the largest in 70 years.
  • We did not feel the hit last year due to stimulus money - this year we are falling off a cliff.
  • The expected revenue decline will be the first time revenue has gone down two years in a row since the Great Depression.
The budget crisis presents a true opportunity to address long-term structural problems in Virginia's General Fund and Transportation Trust Fund revenue structure. I am still studying all of this, but here are some principles I would follow right now in terms of where I draw some lines.
  • At a minimum, the budget should not shift more of the state's revenue burdens to Northern Virginians than already exists.
  • We should endeavor to avoid cuts that can cause permanent damage to state and local programs.
  • Programs that have a proven track record of creating jobs should be preserved and enhanced.
  • Cuts or taxes which disproportionately focus burdens on those who are most vulnerable or have the greatest need or the middle class must be avoided.
  • Education should only be cut after all other options have been exhausted.
  • New revenues, if any, should be focused upon those with the greatest ability to pay or upon those who have a choice as to whether to pay them.
  • The use of debt to pay for ongoing expenses must be avoided and we must maintain our AAA bond rating.

I will post some articles subsequent to this regarding parts of this budget that I believe violate these principles such as the following:

  • Continued significant cuts to higher education;
  • Refusing to rebenchmark the local composite index (not give Fairfax County back more education money due to declining property values);
  • Continued further reductions Medicaid reimbursement rates.
  • Lack of any plan in this budget regarding Virginia's transportation funding crisis.

In the meantime, if you think my decisional matrix is wrong here, post up some comments. I'm willing to listen.

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