How Much Have We Lost?

Friday, March 5, 2010

Proposed Budget Cuts Hit Home

The following article appeared in the Mount Vernon Gazette and Mount Vernon Voice on March 4, 2010.

As the state legislature enters the final weeks of this session, a House-Senate conference committee is trying to resolve the differences in their two versions of the budget. I voted against the budget that came before the House of Delegates because it is short-sighted and will do great harm to our schools and many families in our area.

Education is key to the future fulfillment and productivity of our children and gives them more choices in life. Virginia’s public education system enabled me to accomplish whatever I wanted. The House Budget for education funding is disturbing. It guts kindergarten through 12th grade education by reducing payments to localities by $700 million or $233,000 per Virginia school and including about $40 million for Fairfax County. This will result in 28,000 Virginia educators losing their jobs. When combined with the Fairfax County School Board’s proposals, the proposed cuts are about $1 million per school and $1,000 per child in Fairfax County. This will result in fewer opportunities for Virginia’s children. It will also mean that localities will try to replace this lost revenue by raising real estate taxes yet again.

The House and Senate also proposed to "adjust" revenue and expense forecasts, something which always raises red flags with me. For example, the House and Senate passed legislation to reduce state employee pension contributions by changing payout formulas, delaying and reducing our obligations to state employees. The Pew Foundation estimates that state pensions are already $1 trillion underfunded nationwide, with Virginia’s being 10 percent underfunded. The legislature just proposed to underfund it even further. This is shortsighted and extremely risky in the long-term, setting us up to pay a much larger bill 20-30 years from now.

Today, Virginia’s per capita Medicaid spending is 48th in the United States. The House budget proposed to reduce Medicaid by $400 million. This will result in lower payments to providers and fewer low-income children, pregnant mothers and elderly getting health care coverage. It will also bring higher premiums for all Virginians with private health insurance and is predicated to eliminate 6,000 health industry jobs.

The House Budget also deleted arts funding which will affect local programs like the Mount Vernon Children’s Community Theatre and arts programs in our schools. It also reduced funding for homeless programs affecting New Hope Housing and Good Shepherd Housing. It wiped out funding for United Community Ministries’ Healthy Families Program, a program with a proven record of reducing domestic violence.

The House Budget passed with no Democratic votes for the first time in recent memory. I voted "no." Virginia has always prided itself on first-class public schools and colleges. We have always maintained our AAA bond rating and have been ranked the Best Managed State six of the last seven years. I will continue to fight these proposals because I am deeply concerned we are sacrificing our future for short-term expediency and putting Virginia into the kind of expense cycle that has handcuffed states like California and New York. I am hopeful that the Senate Budget will be more responsible.

I have posted many more articles on my blog The Dixie Pig at scottsurovell.blogspot.com. Good government depends on good communication and your input. Please send me your comments and suggestions.

2 comments:

  1. Hello, Mr. Surovell --

    I am a constituent of yours, and I just read this article in the Mount Vernon Gazette.

    1. Instead of saying that Virginia's state employee pensions are "10 percent underfunded," couldn't we rephrase that to say they are "10 percent overcommitted," and reduce pension benefits to meet the funding levels? That is, why is the answer more funding, and not less spending?

    2. You say that you are "deeply concerned we are...putting Virginia into the kind of expense cycle that has handcuffed states like California and New York," two states that have spent themselves to the brink of oblivion. Yet your entire column decries spending reductions and makes no alternative suggestions. What specific spending cuts do you favor?

    3. If you don't favor any specific spending cuts, which taxes should be increased to balance the Virginia budget, and by how much?

    4. Is there no fat that can be cut from the $2.3 billion Fairfax County education budget? If not, how do you know? If so, where should the cuts be directed?

    Regards,
    Eric Johnson

    ReplyDelete
  2. Hi Eric:

    Thanks for reading and commenting.

    Regarding retirement contributions. I don't think it is right to tell people who have committed 10, 15, 20 years of their life to serving the Commonwealth that we are going to redefine the retirement benefits they have been counting on. People make long terms plans around certain benefit levels. Pulling the carpet out on them after years of service is simply wrong. Therefore, I don't look at it the plan as being over committed.

    The House of Delegates also adjusted our contributions to the plans by making new actuarial assumptions about rates of return and retirement dates. That's kind of like planning your college investments around a new higher rate of return or your kids going to college later - that's why I referred to California and New York.

    Also, the House did pass legislation changing the benefit plans for all *new* employees starting July 1, 2010. That is different.

    Governor Kaine already cut $7 Billion dollars from the $38 Billion state budget. There are some other spending "cuts" that I would favor including:

    - Cutting the $2M movie tax credit we just passed
    - Cutting the "Dealer Discount" that allows retailers like Walmart to keep a percentage of the sales taxes that they keep

    I put cuts in quotation marks because when you are talking about state spending, cuts typically mean asking localities or families to pay for things as opposed to getting rid of the expense. They are typically just shifting costs around as opposed to getting rid of them.

    Third, I have repeatedly been on record as supporting the reinstatement of the Virginia Estate Tax which formerly applied only to couples with more than $7 million of assets (or more with proper estate planning). I cosponsored legislation to that effect this year. I have also repeatedly said that Virginia's system suffers from structural imbalances resulting from a tax system designed for an agrarian/industrial state instead of a suburban/service economy that will perpetually generate these kinds of large revenue shocks. We need to address this problem globally instead of in a piecemeal fashion by raising a tax here or a tax there whenever a crisis emerges.

    The Fairfax County Schools Budget is the responsibility of the Fairfax County School Board. I do not think that we should be cutting full-day kindergarten or other programs that have been in place since I attended FCPS betweeen 1976-1989 including freshman sports, elementary band & strings, subsidized behind the wheel, or require payments for AP/IB/SAT tests. I find it hard to believe that our county cannot afford programs that existed when I was a kid.

    A large part of the County's difficultly results from (a) dwindling state aid as a proportion of their overall budget, (b) hundreds of state and federal mandates that are not funded, and (c) over-reliance on residential property taxes because due to the state's refusal to give the County the authority to tax someone other than it's residents.

    If you have any ideas for spending reductions at either the state level or in the Fairfax County Public Schools, let me know so I can look into it.

    Thanks again for reading and your comments. Feedback from constituents is always very helpful. If you are ever in Richmond during the session stop by the office and we can set you up with a Capitol tour!

    ReplyDelete

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