Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, April 29, 1990 TAG: 9004300230
SECTION: EDITORIAL PAGE: F-2 EDITION: METRO
SOURCE:
DATELINE: LENGTH: Medium
And they might not be aware of the strength of the tides that may await Virginia in this era of rolling recessions.
For the agile, New York Gov. Mario Cuomo being an example, perhaps fiscal trouble need not spell political trouble: His state's deficit is $1.5 billion and climbing, but he's been masterful - and in some measure, accurate - in blaming it on Washington.
But others, less agile, find they bear the blame when they try to raise taxes or cut services, or both, to deal with budget crunches.
The straight-backed Dukakis, who announced months ago that he wouldn't seek re-election, is the most familiar example. But Connecticut Gov. William O'Neill also has decided not to seek re-election because of political realities. Vermont Gov. Madeline Kunin has decided to call it an administration.
Former New Jersey Gov. Thomas Kean and New Hampshire Gov. John Sununu, now President Bush's chief of staff, were lucky to get out when they did, judging from the plunging popularity of successors who're trying to deal with the difficulties bequeathed them.
Closer to home, West Virginia, too, has serious budget problems. West Virginia, though, seems always to have budget problems.
In Virginia, Gov. Wilder so far has proved his agility, but he also has had more room for maneuvering. The Virginia economy still grows; it's just that the growth now - about 6 percent instead of 9 percent annually - is less robust than it was during the middle and late '80s.
The trouble will come if the decline turns out to be part of a continuing trend downward rather than a one-time leveling off at a lower rate of growth.
The worse-case scenario is hardly out of the question. The defense industry has been a major player in the economies of Virginia's boom regions; that industry's future is uncertain. The so-called rolling recessions are a phenomenon that emerged during the '80s: regional recessions amid general prosperity nationally. If it was the oil patch yesterday, and the Northeast today, it could be Virginia tomorrow.
Maybe Wilder's much-vaunted embrace of fiscal "conservatism" reflects a clear-eyed assessment of the potential for fiscal flood that would put him, too, in hot water up to his neck. No one has ever accused Wilder of not calculating for the future.
In trimming expenditures, in establishing a $200-million rainy-day fund and in mitigating some of the damage of the tax-relief-for-pensioners giveaway of a few months earlier, Wilder and the 1990 General Assembly did take some preventive action.
But was it enough?
The rainy-day fund is not an unobligated reserve; it's earmarked for teacher salaries for next fiscal year.
Lottery revenues were diverted from a list of construction projects, many at Virginia's colleges and universities, to prison construction, funds for which were initially to come from the general budget.
The damage of the tax-relief giveaway was mitigated but not erased.
State spending was trimmed - but at the cost, for example, of a reversal in the steady, eight-year narrowing of the gap between Virginia teacher salaries and the national average.
No contingency money has been set aside in case the courts order the state to repay hundreds of millions in back taxes from federal pensioners.
Just as federal policies - particularly new Medicaid mandates - are straining the state budget, so are state policies straining local budgets.
At some point, a tax or two may have to be raised. At some point, voters may have to realize there's a link between what they get from government and how much they give to it.
by CNB