McDonnell’s Budget Shenanigans Getting Old Fast

I was quite happy to see that my hometown newspaper, The Roanoke Times, joined the chorus of those who are able to see through the fallacy of the “surplus” Bob McDonnell announced a while back. The editorial also puts into perspective the fictitious “4.1 percent increase” in state revenue in September from a year ago.

Lawmakers and the McDonnell administration managed to balance the state budget only by putting off spending, using accounting gimmicks and relying on federal aid. Come next year, stimulus money will disappear, the gimmicks will not work again and bills will pile up. In fact, adjusting for some of the accounting tricks, the growth in the first three months of the fiscal year that started in July was 3.6 percent over the previous year. That is still good news, but not good enough.

Budget writers forecast that it would be up 4.2 percent. The difference must come from somewhere. Given the open hostility to tax increases among House of Delegates leaders, that somewhere will likely be schools, health care, law enforcement or some other precious state-funded program.

Next, editorial writers might want to look at the phony “$1 billion VDOT surplus funds” supposedly found by McDonnell’s audit of the agency. Recently, I heard Del. Ward Armstrong (D-Martinsville) explain what the auditors actually found. It was not simply unspent money sitting around.

The $1 billion is closer to $850 million. Much of the money is from funds that localities have been allowed to bank with VDOT because they want to build a road project that exceeds their annual funding from VDOT. For example, if a county was supposed to get $5 million a year from VDOT but wants to complete a road project that costs $9 million, it would be allowed to “bank” a portion of its allotment over a number of years with VDOT. A large portion of the money McDonnell crowed about was the banked funding of Virginia localities.

The other source of the phantom money is a reserve so that VDOT can pay the companies it contracts with in an expeditious manner. As Armstrong explained, when Mark Warner became governor, he discovered that VDOT under Republican Jim Gilmore had absolutely no reserve funding. In other words, it was essentially broke, and its creditors had to wait for money to come into VDOT to get paid. Warner, as a businessman, knew that was no way to run any business, so he implemented a policy that VDOT must have a reserve fund to pay its bills, just as each of us should.

I, for one, am tired of this Republican governor and those in his administration relying on accounting tricks to create “surpluses” and “found money.” Instead, they should take the sage advice of the Roanoke Times editorial:

“There is no reason to fault McDonnell and his budget writers for missing their forecast, just as there was no reason to fault Kaine and his. Instead of playing blame games this time, lawmakers should work together to fill the gap without gutting services even more.”