Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, June 26, 1990 TAG: 9006260424
SECTION: EDITORIAL PAGE: A6 EDITION: METRO
SOURCE:
DATELINE: LENGTH: Medium
Back home, however, termites are gnawing away at one timber that supports his "getting to know you" campaign. They're gnawing away at his gubernatorial record as a fiscal conservative. Wilder is not the cause of the infestation, but he seems to be doing little about it.
For example, the governor appears to accept without demurral the contemporary notion, introduced by Ronald Reagan and now seconded by George Bush, that "fiscal conservatism" means little more than mindless devotion to not raising taxes. In an earlier era, the phrase meant something rather different: a concern for efficient government and fiscal responsibility.
Tax lids and fiscal responsibility aren't mutually exclusive. But neither are they always compatible. The time may be coming soon in Virginia when they aren't: If pressing needs are to be met and the soundness of Virginia's finances is to be maintained, Wilder within the next couple of years may have to ask for tax increases.
That could erase his reputation as a fiscal conservative, under the constricted definition in use today. But possible alternatives - to let Virginia's bond ratings drop, for example, a la Massachusetts - don't exactly do wonders for fiscal reputations, either.
This winter, Wilder and the General Assembly managed to elude a triple whammy - a slowdown in the state's economic growth, fast-rising Medicaid bills and the effects of a Supreme Court decision regarding state taxation of federal pensioners - without any increases in general taxation.
To do it, though, they diverted lottery revenues to general-fund purposes. They postponed capital-outlay projects that, while not immediately essential, can't be postponed forever.
They left little hope that the customary unbudgeted surplus will appear at the end of the 1991 fiscal year. (They set up a $200-million "reserve," then earmarked it for teacher pay.)
They resorted to penny-wise, pound-foolish decisions: perhaps most notoriously, raising tuition rates in a state system of higher education that already had among the highest tuition rates in the country.
As if all that weren't worrisome enough, a handful of active and potential lawsuits against the state could create enormous new costs.
Federal retirees are suing to have $400 million in back taxes returned to them; threatened suits to "equalize" state school spending could cost even more. Throw in small-change suits, such as the Virginia Hospital Association's attempt to win higher Medicaid repayments, and the state's potential liability exceeds $1 billion.
Wilder didn't create those problems. The federal retirees' suit, for example, stems from a U.S. Supreme Court decision that overturned decades-old state tax laws in Virginia and elsewhere. No governor, Wilder included, has control over the defense-spending cuts that are contributing to the commonwealth's economic slowdown.
But how he responds to inherited problems is within Wilder's control - and missing so far is any attempt to instruct Virginians, or the good people of Iowa and New England and the rest of the country, that fiscal conservatism sometimes means raising taxes.
That lesson is hard to teach and hard to learn. But getting it across is important for the nation, and could prove crucial for Wilder's political ambitions.
The Virginia budget adjustments this past winter shored up Wilder's reputation as a fiscal conservative. But the adjustments were makeshift props. Before the timber crumbles, it would be well to do something about the termites.
by CNB