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October 2020 Revenue Report: “Virginia is on sound financial footing despite...

From Gov. Ralph Northam's office: Virginia Issues October 2020 Revenue Report ~ General Fund revenue collections down 2.7 percent from previous year and fiscal year-to-date collections...

Thursday Is Basically Budget Day in Virginia. Here’s Some Analysis.

Tomorrow is, essentially, budget day in Virginia, with the General Assembly returning for one day - and one day only! - to Richmond in...

The Virginia Way is Dead


McDonnell and the Republicans assassinated it. Jeff Shapiro eulogizes it. Tucker Martin tried to resurrect it in a tweet, hailing Colgan's surrender. But in the end, Governor McDonnell's singular focus on self-promotion has turned our legislature into a congressional clone. Governor McDonnell yells rather than leads; just another wannabe bully.

Virginia has received quite a few headlines these last few months. And it's not been about the best state to do business; it's not been about the best place to raise a child. It's been about ultrasound and the socially conservative overreach agenda that the Republicans pursued in the General Assembly session. -Toscano

Two things have become characteristic of Virginia Republicans. They confuse power with leadership and they are more interested in their own ambitions than the welfare of the Commonwealth. This is distinct and different than the Democrats who have been in power and that is clear in both the Jeff Shapiro piece and the descriptions of this session by state Senator Creigh Deeds (D-25th) and Democratic Minority Whip, Delegate David Toscano (D-57th). Contrast the eras of Gilmore and McDonnell with that of Warner and Kaine.  

McDonnell’s Pontius Pilate Pits State Against Localities


The Virginia budget shell game is creating tensions in localities revealing the no tax pledge's fallacy of composition. In the black and white pledger world, there are no consequences to cutting budgets. But stark reality is inspiring grassroots action demanding remedies to the McDonnell budget: LOCAL TAXES.

"I have softened the blow on local governments to allow them to phase in a small differential in tax revenues that need to be paid by local employers. I've allowed them five years to phase that in. I've tried to accommodate them, but these are local employees. They pay for teachers; they're local employees. They have the obligation...We pay a third of all the retirement for teachers even though they're one hundred percent local employees. This differential that everybody's talking about is a very small slice of the whole retirement pie" - Governor McDonnell to WHSV, Staunton, VA. (use Search: McDonnell, then select "1 on 1: Va. Gov. Bob McDonnell)

In Augusta County, an informal citizens group (Support Our Schools) has overwhelmingly demonstrated displeasure, coming out in force to show that grassroots support for funding and necessary tax revenues far outweighs the astroturf pronouncements of the Tea Party. However, popular, oversimplified mantras continue to inform the debate.

PolitiHack On Bob’s Job

There've been reasons to question's veracity before. This analysis contains the very evidence the claim is false, but that doesn't stop the obfuscation. To help the "reporter:" If you pay your car payment by drawing on credit or using your uncle's money, your budget isn't balanced. Ask a banker.

"Even with a surplus, Virginia will be working for years to make up for contributions it withheld from the state pension fund to balance the budget during the recession. The state has also relied on federal stimulus dollars that will not be available in the future. So it's reasonable to question whether the state is really in the black." - from the dirty details McDebtor hopes you don't read

It couldn't be simpler. If you pay for education and infrastructure maintenance by making the state retirement system an officially unfunded obligation, you borrow against your children's futures using bonds to finance transportation, and you keep bad mouthing the uncle who keeps you solvent, there's a day of reckoning on the way. But if you can find an unsophisticated tool in the media, an audience with no business savvy, and hold your hat out to the federal government you claim to disdain, maybe you can get through your term without an accounting.

For that reason, we rate Politi"Fact"'s analysis Mostly Hack.

McDonnell’s “Opportunity at Work” a Whisper Campaign


And it must be so as not to invite raucous laughter. Yesterday McDonnell signed three measures into law. Delegate Sal Iaquinto's (R-Virginia Beach) presents an opportunity to provide relief; the other two are simply laughable. Good news! Revenue generated by human spaceflight and training in Virginia will be reinvested here.

...for fiscal years 2012, 2013, 2014, and 2015, the portion of the net revenue generated by qualified corporations that is attributable to the sale of commercial human spaceflights or commercial spaceflight training, or is incidental to the sale of commercial human spaceflights, shall be transferred to the Virginia Commercial Space Flight Authority...SB1447

State Shifts Burden to Localities…Again

It's no secret any longer that the Virginia Retirement System, once one of the soundest pension systems in the nation, is now underfunded to the tune of $17.6 billion. The budget just passed in the General Assembly short session didn't help the situation.

Legislators wiggled budget figures in order to squeeze out $108 million in additional money for VRS. Typical of the state government in too many cases, much of that money -  $62 million - was "found" by telling localities to pay that much for teacher pensions in yet another unfunded mandate.

While state employees, through bookkeeping sleight of hand, were given a 5% raise and then required to pay 5% of gross pay into VRS, localities were not given the option of requiring teachers and other local employees in the system to pay a portion of their retirement. Yet again, the fiscal cowards in Richmond have shifted the burden of beginning to shore up VRS to local government, which has few budgetary options other than raising property taxes or slashing needed services even further than they already have. By the way, making state employees pay that 5% won't garner any savings for the state in this budget. Instead, it is expected to cost the state an additional $15 million in extra Social Security taxes to cover the raise.

McDonnell’s Maladroit Manipulation

Governor McDonnell's consistently inept fumbling in each state finance proposal should be an object lesson for tax cut cultists. Privatization of the ABC stores and the VRS budget slight of hand are prime object lessons. But even so, the unchallenged persistence of insistence is a convincing argument maintaining the illusion.

Privatization of the ABC stores is a case study in a political promise without foundation that has morphed from a windfall for transportation to a simple implementation of free market orthodoxy. Underfunding the Virginia Retirement System (VRS) has gone from the illusion of a budget surplus to the realization that a "loan" was made without consideration of or requirement for a practical repayment plan. In both cases the obligation can is being kicked down the road with a rationalization that some fundamental principle is being employed that trumps reality. Adjust your meme and say it often enough, and so it seems, it is remembered as your original justification.

Try this at home: run your credit card balance up a limit that was established in different times. Then, don't pay the bill and inform the company that due to the fact that the limit was set under conditions unlike today's (a fact beyond your control, after all), you have no obligation to pay the full balance and the card company must cover the difference PLUS let you defer your payments. That's how the state is treating its obligation to its employees. It has allowed the obligation to state employees to exceed its current projected ability to pay, is asking them to pay the difference AND deferring funding the obligation. This is worse than robbing Peter to pay Paul. It is robbing Peter to pay Paul and telling Peter to match our payment to Paul on the promise Paul is holding it all for Peter.  

Cline Rips Fake Budget Surplus


While Bob McDonnell and others in his administration are busy spending that non-existent "budget surplus," at least one Republican, Del. Ben Cline (R-Rockbridge), sees through the phony numbers and is calling for Bob McDonnell to use the available funds to end what Cline called two accounting maneuvers used to "balance" the state budget - not paying $620 million due to the Virginia Retirement System and forcing merchants to pay their sales tax receipts early.

Cline opposes the planned uses for a fake $400 million "surplus," mainly for a state employee bonus, a pittance for transportation, etc. Since the phantom money was found by accounting tricks, Cline, along with Del. Ward Armstrong (D-Henry), wants part of the money used to begin paying what the state owes the VRS for this biennium.

Last March, a study by the Pew Center on the States criticized the way the General Assembly and McDonnell used obligations to the state retirement fund to "balance" the budget. While we hear all the time how Virginia is the "best managed state," the Pew Center study put Virginia's retirement fund below fifteen other states, in the "needs improvement" category. Plus, the only reason Virginia ranked as well as it did in the study is the fact that more responsible plans run by counties and cities "helped save the state," according to the VRS board of trustees.

That Pew Center study didn't even include the worst of the 2008-2009 damage to state retirement funds. Virginia's underfunded VRS system is not simply the product of the recession, but also caused by deliberate policy moves by the legislature.

A 2008 report by the Joint Legislative Audit and Review Commission stated that state contributions to VRS have been lower than the board certified rate in ten of the last eighteen years, making VRS a bi-partisan loan agency for the Commonwealth. During those same 18 years, localities paid the amount the VRS board certified as necessary.