Virginia surpluses and spending are out of control. I have frequently stated in the past that Virginia is sorely in need of real and meaningful budget reform. We need to take a closer look at how we spend the people’s money and make certain we spend it on their priorities – not government’s. It took Virginia nearly 400 years to get to a $30 billion budget, but just over the last decade, we’ve more than doubled that number to almost $65 billion.

It’s easy to simply raise taxes. The hard work is identifying priorities and budgeting accordingly; identifying waste, redundancy, abuse, excess and needless spending, and as former Governor Wilder put it, “niceties”. I am confident that once such work is done, Virginia will be in a far better place to adequately fund transportation, education, and even health care – without raising taxes.

For example, Virginia still funds programs seventy years old to make sure milk is affordable. We have incredible redundancy in programs, and spend outrageous amounts on overhead. The Virginia Center for Behavioral Rehabilitation has 137 staff positions to take care of only 9 inmates, with a budget of nearly $6 million, totaling a taxpayer expenditure of more than $666,666 per inmate per year. Virginia’s two schools for the deaf and blind have combined annual budgets of $13 million and a total enrollment of 228 students. At more than $60,000 per pupil, private tutors would be less expensive (and likely more effective).

Many of us, even with limited resources and information, have started this work. Below, please find a link to a report that the Thomas Jefferson Institute for Public Policy just released, called “Is This Spending Necessary?”, Ideas for Reducing Virginia’s Budget. It was authored by Washington Post writer Melanie Scarborough. I know you will certainly find it interesting, and I’d strongly recommend you take a few minutes to read it. I also encourage you to also pass this on to friends and neighbors so that they too will have the benefit of this information about where their money is going in Virginia.

Click here to read report.

I’ve also included below commentary I wrote about the recent announcements from the Governor about even more surpluses in state finances.

Commentary
By Jeffrey M. Frederick
Member, House of Delegates
52nd District
Friday, July 22, 2005

As you may have seen, a number of news organizations have been reporting in recent days the announcement by Governor Warner that the 2005 fiscal year will end with a $545 million surplus. This brings the total surplus to well over $2 billion.

Before we even started the 2004 regular General Assembly session (the year we passed the largest tax increase in Virginia history), we now know that Virginia was already running a more than $2 billion surplus.

Yep. $2 billion. Let me explain.

Virginia runs on a 2-year budget. Each even-numbered year (i.e. 2004), the General Assembly (GA) with the Governor enact a 2-year spending plan, but it also enacts what is nicknamed a "caboose" budget. The caboose is an amending of the current spending for the July-June spending. So, when we went to work on the 2005-2006 (which actually goes from July 2004-June 2006) budget in the 2004 session, we also amended the remaining 5 months in the 2003-2004 budget. At that time, we were running a $324 million surplus, so we spend that additional money in the caboose.

Similarly, in this year's 2005 session with the 2005-2006 budget already in place, with a then forecasted $1.2 billion surplus on the horizon, we modified the 2005-2006 budget in February to spend that additional $1.2 billion in revenues.

If the General Assembly is in session at a time when a surplus is found, but before the actual fiscal year ends, then the GA can appropriate (spend) that money any way it wants by developing a caboose budget. If an additional surplus is found between the time when the GA adjourns (February/March) and the end of the fiscal year (June 30), then Virginia law stipulates where that surplus should go, such as the rainy-day fund.

That's the situation we're in now, and the subject of today's news reports. Now, nearly 6 months after we adjourned the 2005 session, the Governor reports to the citizenry that there is yet an additional (unforeseen) $545 million as of June 30. This, of course, is on top of everything else we've found out since passing the 2004 tax increase of more than $1.6 billion.

I know all this may seem confusing, but the bottom line is this: add the $324 million surplus we had at the end of FY 2004, plus the additional $1.2 billion we had walking into the 2005 session (which we spent in that session), plus the $545 million the Governor just announced, and you have a $2.07 billion surplus Virginia is now running since the first day of the 2004 tax-hiking session (this is before and without the tax increase).

Governor Warner's budget forecasting raises serious questions. The difference between what he forecasted and what has actually occurred is more than 222%!!! That's a two-hundred, twenty-two percent margin of error! This is the worst record of a Virginia Governor in more than 20 years.

Many of us in the House of Delegates don't see this as unintentional. Warner entered the 2004 session with the number one goal of raising taxes. It seems very possible that in order to secure the passage of those tax increases that ultimately occurred, he could not be honest with the people about the state of Virginia's fiscal house. He had to cry wolf saying we were in a fiscal crisis, and in order to do so, had to make sure that economic figures didn't undermine his position. So, he either kept the good news of massive surpluses from all of us, or proved to be outright incompetent when it comes to budget forecasting. For a guy who personally made millions in private business, I just can't see Warner messing up this bad without it being on purpose.

I hope the background information I provided above helps put things into context as you continue to hear report after report of Virginia budget surpluses -- surely not to end anytime soon.