Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, March 5, 1992 TAG: 9203050472
SECTION: EDITORIAL PAGE: A-11 EDITION: METRO
SOURCE: RAY L. GARLAND
DATELINE: LENGTH: Long
Bills you thought safely dead are suddenly resuscitated. Committees of conference are appointed to work out the differences between House and Senate versions and come back with versions of their own that are mumbled through in the babel that descends upon the legislature in its final hours.
Sooner of later, somebody trots out Bismarck's famous injunction, "He who would respect either laws or sausages should not watch either being made." But the German titan also allowed that "Politics is the art of the possible." To which might be added, in the right hands it can also be the art of the impossible.
The '92 assembly considered a number of major tax proposals and decided to pass none. It's not that there wasn't a majority of legislators willing to raise a lot of fresh cash. It was a case of the House liking those new taxes that the Senate didn't, and vice versa. Unable to agree on major sources of new revenue, they have done the American thing and agreed to borrow the money. Though exactly how much is not at this point entirely clear.
Both houses have heeded Gov. Douglas Wilder's advice and scheduled a public referendum this November on general-obligation bonds in the amount of $613 million to fund a variety of construction projects at state colleges and other agencies.
The House wanted twice as much, but with a twist. The debt would have been serviced by raising the sales tax another half-cent. That is, voters would have been asked to approve both the bonds and the means to pay interest and principal over their life. Any money left after debt service each year would have gone to narrow the "disparity" between rich and poor school divisions.
Having seen the proposed "pledge-bond" amendments to the state Constitution go down to ignominious defeat at the polls in 1990, the House notion of tying a tax increase to $1.2 billion in new debt was too much for Wilder. As there was no possibility that proponents could muster enough votes to override his veto, they "receded" from their position.
But the idea isn't entirely dead. As this is written, the House and Senate are trying to compose their differences on a separate bond bill for roads in the range of $550 million that would be serviced by an increase in the state gasoline tax of 2 cents per gallon.
Wilder has yet to be heard from on this, but he's unlikely to be receptive to the idea of campaigning this autumn for almost $1.2 billion in new debt and a tax increase into the bargain. If he vetoes the bill for road bonds, there's no chance whatsoever that he could be overriden.
Based upon history, the $613 million in general-obligation bonds will find strong support among voters this November. My guess is that the same would have been true for the $557 million in road bonds even when tied to a modest increase in the gas tax - provided the list of projects had been judiciously drawn to give a taste to every part of the state.
But a year from now the contest to succeed Wilder will be in full cry, and the governor must surely be turning his thoughts to composing the legacy of his administration. During his first two years he confronted a fiscal crisis as grave as any faced by a governor in 50 years. While he had recourse to a variety of fiscal gimmicks, the record will be that he resisted the temptation to solve the problem by coming back on hard-pressed taxpayers in a recession. At this stage, there's not much to be gained by reversing field and going out as a tax-and-borrow governor.
If the economy picks up, there's sure to be a spare hundred million or so in prospect next January to sweeten funding in 1993-94 for such vote-getting items as raises for teachers.
If you add the $613 million in bonds almost certain to be approved, total state spending under the 1992-94 budget will hardly be less than $28.5 billion. That would represent an increase of 12 percent over the $25.4 billion projected to be spent when the books are closed June 30 on the 1990-92 budget.
I am indebted to the two accountant-members of the state Senate, Walter Stosch, R-Henrico, and Kevin Miller, R-Rockingham, for their analysis of state spending in the years 1983-91. According to their figures, the average, annual growth in personal income per resident was 6.4 percent. But the average, annual increase in state spending was 8.9 percent.
Though 1990-92 was undoubtedly a period of budgetary austerity for Virginia, expenditures under the new budget will exceed by 135 percent the amount expended 10 years earlier, in 1982-84.
While increases in Virginia personal income during the 1992-94 budget are written on the wind, they are unlikely to equal the projected increase in state spending of 12 percent.
That means a continuation of the trend under which state spending rises faster than the incomes of taxpayers. And Virginia's problem is minor compared to that of the federal government, which will have to borrow 25 cents of every dollar spent in fiscal '93.
There is no larger point here than the old and boring story: Whatever money government can raise from existing or new sources of revenue will be spent, and whatever borrowings the capital markets can absorb will be made. At no point in that process will advocates of higher taxes and spending profess themselves satisfied.
Ray L. Garland is a Roanoke Times & World-News columnist.
by CNB