Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, December 20, 1994 TAG: 9412200092
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: METRO
SOURCE: DAVID M. POOLE STAFF WRITER
DATELINE: RICHMOND LENGTH: Long
Allen warned General Assembly Democrats that their failure to go along with his plan to trim $400 million from the 1995-96 state budget could earn them the wrath of voters in next year's legislative elections.
"I have made the necessary hard choices," Allen said. "Next month will be time for you to choose: the status quo, or an exciting new era of freedom, opportunity and responsibility for Virginians."
The Democrat-controlled money committees were deferential to the Republican chief executive, giving him a standing ovation when he entered and exited the crammed hearing room. But they immediately pounced on Allen's advisers, who were left behind to defend budget recommendations.
Democrats said they were all for tax relief, but questioned whether the state could afford losing $2 billion over the next five years.
Del. David Brickley of Prince William County - sitting in for the absent House Finance chief Richard Cranwell of Roanoke County - cautioned that cutting state income taxes could shift the tax burden onto localities.
"We cannot be compared to New Jersey," Brickley said, referring to a tax cut in that state that resulted in large increases in local real-estate taxes.
House Appropriations Committee Chairman Robert Ball of Henrico County questioned the wisdom of cutting taxes at the same time the state is preparing to go into debt to build prisons to handle a surge in inmates caused by Allen's no-parole policy.
Republican Del. Clinton Miller of Woodstock agreed that such a scenario could jeopardize Virginia's AAA credit rating and make a mockery of the state's pay-as-you-go tradition.
"I'm very concerned about the almost cavalier readiness we have in government to resort to debt. If you took the funds for the tax cut alone, they would pay for the corrections facilities," he said.
Next week, the Senate Finance and House Appropriations committees will begin a series of public hearings on Allen's budget recommendations.
In Southwest Virginia, the panels will hold separate hearings on Dec. 28 at noon at Southwest Virginia Community College in Richlands and at 1:30 p.m. at Patrick Henry Community College in Martinsville.
Monday, the task of defending Allen's budget recommendations fell to Finance Secretary Paul Timmreck and Budget Director Robert W. Lauterberg.
They described the spending plan as the vehicle for making good on Allen's campaign promise to reduce the size of state government by curtailing or eliminating nonessential programs.
Allen would eliminate $149 million in revenue for the fiscal year that begins July 1. The money would stay in the pockets of individual income taxpayers and businesses, both of which would see their tax burden gradually decline over the next five years.
Some programs would be free to grow. The Department of Corrections would see its budget soar by $92 million next year. Allen also wants to supply another 8,100 prison beds by borrowing $175 million early next year and asking voters in November to approve another $227 million in debt.
Allen would reduce original cost estimates for building and operating the new prisons by relying on private contractors to provide another 10,000 beds over the next 10 years.
To make up for the tax cut and prison costs, Allen has proposed some $400 million in spending cuts in the next year. Most of the savings would be painless: Medicaid costs will be lower than expected next year; there will be fewer children than expected in public school systems; state accountants will conjure a one-time savings by drawing down state employee health insurance reserves and selling off a state loan portfolio.
Still, Allen had to propose about $150 million in real cuts, including the elimination of nearly 1,100 state jobs through attrition, early-retirement offers - and pink slips.
Most of the remaining cuts are spread out over scores of agencies and programs. Some of the money would come at the expense of powerful Democrats' pet projects - such as $200,000 from the Explore Park near Roanoke in Cranwell's district.
Allen spared the foundation that is restoring Poplar Forest in Bedford County, the second home of Thomas Jefferson, whom Allen quotes in nearly every speech.
Democrats said many portions of Allen's budget appear to be in conflict. He would beef up tourism promotion, yet cut by one-half funding for museums, which often are local tourist destinations. He would go on a prison-building spree while cutting grants to police departments by nearly 10 percent.
Roanoke, for instance, stands to lose $164,000 in state law-enforcement grants next year.
Some Democrats wondered aloud whether Allen really wanted to pass a tax cut.
"Does he really want us to pass this tax-reduction bill or does he want some of us to try to kill it and then beat us over the head with it when we run for re-election?" asked Sen. Richard Holland, D-Windsor.
The entire legislature, weighted slightly in favor of Democrats, comes up for election next fall.
Memo: ***CORRECTION***