ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Monday, February 3, 1997 TAG: 9702030099
SECTION: EDITORIAL PAGE: A-4 EDITION: METRO
FROM his self-assumed role as champion of higher education, and now from his hints of support for a state tax increase, you might have the impression that wealthy Northern Virginia developer and GOP contributor John T. "Til" Hazel Jr. has somehow - and, for these times, bizarrely - turned from a cost-conscious conservative into a big-spending liberal.
If so, you'd be wrong. It is precisely because Hazel remains a shrewd businessman, refusing to let political emotion get in the way of reading a balance sheet, that he has concluded the state must collect more revenue if it is both to avoid a fiscal crisis and to lay the groundwork for a robust future. His conclusion is the result of hard-headed analysis, not a change of ideological stripes.
In a fact-filled, well-reasoned essay titled "Virginia's Fiscal Dilemma: How to Pay for Prosperity in the Old Dominion," published recently by the University of Virginia's Weldon Cooper Center for Public Service, Hazel argues persuasively and soberingly that Virginia is increasingly unable to fund the services and make the investments on which Virginia's prosperity and quality of life will depend.
The typical Virginia politician's paean to the state's financial soundness cites its frugality, its AAA bond rating, its balanced budgets. Hazel respects the tradition - and cuts through the smoke and mirrors to get to today's reality.
Yes, Virginia ranks 40th in per-capita state and local expenditures, and 49th in state and local spending per $1,000 of personal income. But frugality is not uniformly a good thing. Not regularly changing the oil in your car is frugal, until you blow the engine. Skimping on education or transportation saves money, until you find yourself with a work force or transportation network inadequate for the demands of a 21st-century economy.
Yes, Virginia has an excellent bond rating. But that won't last much longer if the state continues to issue and authorize debt at the accelerated pace of the 1990s, during which debt-service costs have risen 645 percent.
And yes, Virginia balances its budget. Well, sort of. In fact, as Hazel points out, state budgeteers in recent years have increasingly relied on debt, one-time-only revenue, lottery proceeds, deferral of capital maintenance and accounting gimmicks to balance the budget.
As a temporary resort in a fiscal crunch - for example, when revenues nose-dived during the recession of the early '90s - such techniques are defensible. But employed chronically, as has been happening since 1990, they simply mask the underlying fact that the state of Virginia is running a structural deficit. Even with economic recovery, routine revenues consistently fall short of routine expenditures.
Now, the various short-term devices for plugging the gap are getting used up, and several areas of state spending sorely need bolstering. More pressure could well be put on state finances by federal budget-balancing and devolution of responsibilities. The state's annual carry-over surpluses, which help balance subsequent-year budgets, have been shrinking steadily.
It's time for principled politicians to heed Hazel's warning, and stand tall for Virginia's tradition of responsible fiscal planning and policy.
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