By Paul Goldman
“Credit Card” Bob, aka His Excellency, Governor Robert McDonnell, apparently had his conversion on the road to Damascus while in a movie house watching a rerun of the classic movie “The Graduate,” This has now produced a once-in-a-lifetime opportunity for the Democratic leader of the State Senate, Dick Saslaw, to play Mark Warner and jump to the head of the party’s 2013 gubernatorial hopefuls should he want to run. But in any case, the state still needs him to take the lead in putting some limits on “Credit Card” Bob.
In one of filmdom’s legendary moments, Dustin Hoffman’s character, just out of college, was being advised by his father’s friend about the future, which came to down to just one word whispered in the young man’s ear: “plastics.” To me, the meaning of the word “plastics” was clear. But then, in all honesty, I was distracted at the moment, talking to an attractive woman seated next to me who – no kidding – thought I looked like the actor because of my hair. Unfortunately, she didn’t turn out to be Mrs. Robinson. But then again, I wasn’t Dustin either.
That aside, looking back on it today, 43 years later, the recent announcement by “Credit card” Bob — not to be confused with the last Republican Governor “Deficit” Jim Gilmore — demonstrated yet again why it is so important to understand the importance of pop culture’s influence on impressionable youth. To me, the word “plastics” wasn’t meant to encourage Dustin Hoffman’s character to go out and see how much debt he could run up on someone else’s credit card.
In hindsight, the script writer, the director, the producer, everyone on the set had the option of saying that to be perfectly clear, the script could have used the term “industrial plastics.” Granted, the one-word punch line worked brilliantly in the movie. But surely “industrial plastics” would have worked well too, and potentially avoided confusing the young Mr. McDonnell, and a whole generation of GOP men of certain age.
Could this simple change in the script have avoided what Virginia faces now?
Alas, we will never know: What we do know is that “Credit Card Bob” has used the powers of his office to persuade usually independent government staffers and other generally sensible individuals to bend the rules which were put in place to stop a repeat of the mess left to Mark Warner by “Deficit” Jim Gilmore. I had the pleasure in 2001 of writing the fiscal plank to the Warner campaign platform, actually a reward for having to write and edit the final version of the whole thing, which was so long it needed its own shelf space at the Library.
Yet at least “Deficit” Jim was honest about this fiscal dishonesty’ that is to say, he didn’t ask anyone to change the rules, he just made up new ones himself without caring whether they actually added up.
“Credit Card” Bob thinks he can slice the baloney a lot thinner and then sell it without calling it a baloney sandwich. As reported by the ace blogging tag team of the Washington Post, Ms. K and Ms. H. (aka Anita Kumar and Rosalind Helderman), the only reason “Credit Card” Bob was able to announce his plan to sell – his able staff needs to learn the difference between authorizing the issuance of something and then actually doing it – nearly $3 billion dollars in transportation bonds that no other Governor would have dared sold is due to a vote by a semi-secret government committee (that it is unknown to the state’s working families) called the Debt Capacity Advisory Committee.
Until now, this Debt Committee saw its role as making it hard for Governor’s to leave a legacy of red ink for future generations of Virginians to pay off. But His Excellency has convinced these Debt Guardians to become Debt Advocates, and chow down on the McDonnell baloney.
As Ms. K and Ms. H report, the existing state rules, adopted to prevent a Washington-style debt explosion and harm to Virginia’s AAA bond rating, made it impossible for His Excellency to push this extra $3 billion on the people right now. This is due to the way the rules always have been applied. In order to prevent Governors from bathing us in red ink, only 5% of the state’s annual revenue can be used to pay the debt service on bonds.
You ask: Why isn’t the bond limit tied to the total amount of the bonds outstanding? Consider a situation where bond interest rates are high. This would allow the politicians to keep issuing rates to until the cap was met, even though it meant the debt service, what actually has to be paid, would keep rising, eating education funds for example.
Thus, the 5% cap, based on debt service as a percentage of annual revenue, is the far smarter way to go. Especially given that because of the Great Recession — and now the Not-so-great Recovery — state revenues are not growing nearly fast enough to allow servicing “Credit card” Bob’s addiction to plastic.
Precisely who first had the idea of taking the members of the Debt Committee to a massage parlor isn’t known. Virginia has some AAA rated spas, so I presume they were feted at the best. Now, back after such an energizing experience, they have interpreted the 5% cap on annual debt service to mean an amount not to exceed 5% of the annual revenue based on the average annual revenue projected to be collected by the state over the next ten years.
But you ask: How does anyone know how much revenue the state will get three years from now, much less 10 years from now? That’s a good question, because if “Credit Card” Bob gets his way, we are back to Gilmore financial accounting — first you figure out how much you want to do, and then you develop the projections to prove that you can do it.
Enter, then, Dick Saslaw, head of the Democratic-controlled Senate. Saslaw undoubtedly saw “The Graduate,” and came away knowing it wasn’t a promo for VISA or MasterCard.
Tax-supported state debt has risen 50% in recent years, so this isn’t a case of McDonnell wanting to issue more IOU’s when Kaine or Warner didn’t do it. Such financing is prudent if done right; long-term investments in infrastructure being important to the state’s future. The best corporations in America use such financing. But so does the government in Washington, which shows how it can be abused, big time.
Moreover, it is also true that neither Warner or Kaine, nor any other Governor since Baliles, has convinced state lawmakers to support a new, sustainable source of transportation financing. Thus I have always cautioned against blaming McDonnell for a problem he inherited, without acknowledging the issue in the broader context.
But this new transportation baloney is a meal cooked up solely by the McDonnell Administration. To suggest that it was just pure luck that Debt Guardians morphed into Debt Advocates is not believable. Or as Yogi Berra said, some things are too coincidental to be a coincidence.
Dick Saslaw has a once-in-a-lifetime opportunity here. Truth is, after you back out the money needed to just maintain the aging road system we currently have, more than half of the state’s transportation money goes to pay debt service on these bonds!
That’s right: Budget wise, we have roads built with plastic, not cement. No wonder they have so many potholes in them.
“Plastics” has indeed, as predicted 43 years ago, become the future of transportation in Virginia. But even if Dick Saslaw succeeds in exposing the baloney, the larger truth remains: whether you borrow the money or raise taxes to get the money, all Richmond has is a plan to spend billions, not a true visionary blueprint that tells Virginians where our leaders believe we need to be on our transportation grid in 2050.
Neither a wish list, nor various projects that powerful political interests have managed to get to the top of the list, makes a real plan for the future.
I repeat my advice stated for months now: if our leaders would agree to get the right people together to produce a bipartisan blueprint for Virginia’s future in this area, we could then solve the financing issues. But until then, it is just going to be one battle after another in an endless war over the same turf, all the time saying we want to solve the problem, but not really.
In that regard, don’t be surprised if a future generation of Virginians finds us to be rather “plastic” in that regard,