Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, January 10, 1992 TAG: 9201100443
SECTION: EDITORIAL PAGE: A-8 EDITION: METRO
SOURCE:
DATELINE: LENGTH: Medium
THE GOVERNOR'S BLEAK BUDGET
GOV. WILDER'S surprise withdrawal as a presidential candidate grabbed the headlines. But most of his State of the Commonwealth address Wednesday night dealt, predictably, with budget issues.Just as predictably, the state's 1992-94 budget picture is bleak. Simply to maintain current programs would cost $567 million more than expected revenues.
On the spending side, the potential shortfall is fueled by escalating Medicaid costs over which the state has little control. On the revenue side, it reflects a national economy in recession; no longer can Virginia's fiscal woes be blamed on budgeting misjudgments.
The challenge is to confront the situation in a way that does not undermine Virginia's long-term future. In the governor's budget proposals, there are glimmers of recognition of the nature of this challenge. Unfortunately, they are only glimmers.
To avert a deficit in the '92-'94 budget, the governor proposes to jack higher the already high tuition rates at state colleges and universities; to once more deny pay raises to state workers, college professors and schoolteachers; to cut or end state funding for an array of services of varying cost and worth; to defer implementation of scheduled tax breaks for certain corporate and individual taxpayers; to terminate the jobs of 900 state workers, including 120 Virginia Tech extension agents.
Yes, there are bright spots, though even they can be troubling:
Unlike the emergency responses to the revenue shortfalls as they unfolded in '90 and '91, the proposed '92-'94 budget does not appear to depend on accounting gimmicks, diversions of earmarked funds and the like.
But this is due in part to the exhaustion of one-time-only gimmicks and diversions. For example, state-lottery proceeds were diverted in the last budget from capital outlay to the general fund, where they remain embedded in the '92-'94 budget. You can't divert what's already been diverted.
Rather than propose across-the-board cuts, Wilder and his budgeteers have sensibly sought to set priorities among the competing demands for state services and the dollars to pay for them.
But a priority unfunded is a priority unmet. Education is his highest priority, Wilder said, and he proposed increasing state school money by $600 million. Yet that would merely restore earlier cuts and provide for inflation and rising enrollment. It's a far cry from the $1 billion the state Board of Education figures is needed just to get back on track; Virginia's teacher-salary gains of the '80s would continue to erode in the '90s. State disinvestment in higher education would go on.
Wilder is on target with his increases, albeit much too modest, in programs for poor children. It is by such means that there's hope of averting future costs of allowing children to grow up poor and uncared for.
Others of the governor's priorities, however, are open to question. Must there really be $63 million in new spending for local jails and medium-security prisons - or should the state finally get serious about alternative punishments for non-violent offenders? Must the state's tourism-promotion appropriation really be slashed by 15 percent - or should it be increased, with the goal of reaping tourist tax revenues that outstrip promotional costs?
In proposing a levy on health-care providers, the deferral of scheduled tax breaks and the issuance of $200 million general-obligation bonds in each of the next three years, Wilder is declaring - correctly - that a responsible budget cannot depend entirely on spending cuts.
But the governor is not declaring it loudly enough. There's no quarrel here with the need for a bond issue. It would be for long-deferred capital projects, and the time is right: Interest rates are low, construction firms are hungry. Nor is there any quarrel here with deferring the tax breaks.
But the one tax increase - on health-care providers - is of only marginal help. The $68 million in projected revenue is but a drop in the fiscal bucket. Where is the call for increasing the cigarette and alcohol taxes? For raising the sales tax, with the new money earmarked for education? For adding a new top bracket of 6.25 or 6.5 percent to the state income tax, whose top rate now of 5.75 percent is among the lowest in the country?
Wilder's slash-and-burn-just-to-get-through-the-biennium budget assumes the state can't afford to do more than he proposes. But particularly in areas that amount to investments in the state's future, the real question is: Can Virginia afford not to do more?
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