Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, March 30, 1995 TAG: 9503300067
SECTION: EDITORIAL PAGE: A-11 EDITION: METRO
SOURCE: RAY L. GARLAND
DATELINE: LENGTH: Long
At the assembly's recent session, Allen made one heap of all his winnings from a strong first year and risked it in a daring gamble, designed to force a slower rate of growth in state spending well into the future. But Democrats desperate to maintain a majority they've enjoyed since the last century stood united and fierce against the governor's program.
There were hints Allen would renew these battles at the assembly's "veto" session April 5. That would take the form of forcing opponents (including some Republicans) to go "on the board" against tax cuts and spending restraints. This strategy would have underscored Allen's complaint of measures bottled up in committee and not brought to the floor for an up or down vote.
But instead of refighting old battles, the governor opened a new front. He will ask legislators to make a commitment now to hand over all profits from the state lottery to counties and cities, to be earmarked for public schools. Aside from that rather large item of business, he isn't picking many new fights.
Lottery profits, running at $300 million a year, would be phased out of the state budget and into local budgets over five years, beginning with a $15 million downpayment in the coming fiscal year.
There can be no question, getting the lottery profits would be an enormous windfall for localities. While the formula that would be used to distribute the funds isn't settled, it could mean as much as $8 million a year for Richmond by the year 2000; $3.8 million for Roanoke; $27 million for Virginia Beach and $40 million for Fairfax County. The inevitable other side of the coin is that once deprived of these funds in the state treasury, the assembly might have to reduce aid it's now providing localities.
The idea of earmarking general revenues for a specific purpose is a dubious proposition. Once money flows into the pot, it can be put to many uses, including tax relief. It's hard to imagine any language the legislature might adopt requiring the lottery windfall to be used only to increase local spending on education, nor should there be such language.
To pay for the $15 million first installment of lottery profits to localities, and $6.5 million in additional spending requests, Allen has proposed a mixed bag of cuts. Some of these renew requests made in his original budget message, such as reducing state aid for public TV and radio by $209,000; deleting $129,000 for local poverty agencies and realizing $305,000 from the sale of the state yacht.
Larger sums would be found by reducing state aid to localities for general relief by $3.4 million and grants to local mental-health boards by $1.5 million. The governor would also cut $3 million for low-income housing and save $4.1 million by continuing his moratorium on the purchase of new vehicles. Another $3 million would come from the sale of surplus state property and $1.5 million by tinkering with Medicaid.
Allen is persuaded, apparently, that the state Senate has trimmed its own budget sufficiently. But he's asking the House of Delegates to delete $355,000 for redecorating committee rooms and $707,000 from operating expenses. While the cost of running the legislature has grown far faster than most state agencies in the past 20 years, this may be the first time a governor has demanded cuts.
Well, it has come to this: In a budget of $16.5 billion for the fiscal year beginning July 1, we're down to disputing a mere $21 million and change.
That's in the here and now, of course. Had the governor's tax cuts been enacted, legislators would have had $2 billion less in general-fund revenues to please clamoring claimants over the next five years. Now, giving up lottery profits to local governments would open a similar hole.
These numbers, while large, should be seen in the context of anticipated general-fund revenues during 1995-2000 exceeding $40 billion. With most costs fixed and predictable, however, it's at the margins of the budget that legislators make their mark with constituents: a few hundred thousand more here; a few million more there. Either the tax cuts or the lottery proposal would have the effect of reducing the growth in general-fund spending over the next five years by roughly 50 percent. But in the case of the lottery money, it would be moved from one governmental pocket to another.
It will be easy for legislators to reject the governor's lottery gambit because there's no important constituency to be offended. Allen may have logic on his side in arguing the lottery money will be better spent at the local level; that it may keep local taxes from rising or even permit them to be reduced. But that's a little circuitous to get most citizens very excited. Even local officials, who should be cheering him on, seem uncertain.
If legislators wouldn't adopt a modest tax cut when they had weeks for public input and debate, they will hardly pass something as important as redirecting lottery profits in a session normally designed to last a single day.
There's at least one good idea here, maybe more. The governor's proposed cut in personal-income taxes was soundly conceived to help young families the most, and lottery profits should have been shared with localities from the beginning. But the better politics would have made this prospective, aimed at this fall's election for all assembly seats and the 1996-98 budget that will be Allen's to shape from the start.
When trying to do so much, before the ground is sufficiently prepared, even good ideas have a way of seeming to be damaged goods. It isn't impossible for Allen to regain his footing by explaining clearly what he intended. But the road will be long and hard.
Ray L. Garland is a Roanoke Times & World-News columnist.
by CNB