Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, May 23, 1993 TAG: 9305240239
SECTION: EDITORIAL PAGE: C-2 EDITION: METRO
SOURCE:
DATELINE: LENGTH: Medium
State government's revenue likely will come up at least $1.5 billion short, and probably more, in the 1994-96 budget period beginning next July. That shortfall reflects known, required spending increases for existing programs: on Medicaid and other health-care costs; on maintenance of state prisons; for enrollment increases in public schools; for debt service on general-obligation bond issues - to mention a nondiscretionary few.
The $1.5 billion figure does not reflect salary increases for state workers, college faculty or school teachers; or a penny for new capital outlay; or any allowance for federal mandates that likely will come down the pike, or any new spending initiatives.
Nor does it include any new spending to resolve funding disparities among Virginia's school divisions. Nor does it take into account another potential budget-buster: a U.S. Supreme Court ruling this summer that conceivably could force Virginia to make tax refunds of about $467 million to federal military and civil-service retirees.
Though Andrews doesn't say so flat out in his 24-page memo to other Senate members, he broadly hints at it: A tax increase may be necessary even with a hold-the-line budget. And it could be a big one.
Meanwhile, Gov. Wilder, who'll draw up and present the 1994-96 budget shortly before he leaves office in January, has been determined to have no tax increases attached to his record.
So what will happen?
Granted, the governor has shown commendable fiscal stewardship during recessionary times when Virginia, along with other states, faced unprecedented revenue shortfalls.
His strong hand on budget issues was key to Financial World magazine's ranking of Virginia, for two years in a row, as the nation's "best managed" state. (City & State magazine also applauds Virginia's fiscal discipline.)
And this too must be noted: that Wilder inherited state budgeting problems from his predecessor and fellow Democrat, Jerry Baliles. Baliles was an activist who presided over Virginia during a go-go economy. He committed the state to spending levels that were hard to sustain once the recession hit.
Still, the question remains: Will Wilder, as ace fiscal manager, make sensible provisions for the future? Or is he so politically fixated on no-new-taxes that he'll have no qualms leaving behind a $1.5 billion-plus problem for whomever is elected in November?
Wilder - as much as Andrews - knows that tax increases may be unavoidable for the next two-year budget period. But whether the next governor is Mary Sue Terry, the Democrats' nominee, or one of the three men vying for the GOP nomination, this may be of little moment to him.
Wilder may even relish a successor having to raise taxes. Forevermore, he could draw the contrast between himself and Baliles, and himself and his successor, like tax-and-spend bookends on either side of his administration.
Perhaps we misjudge Wilder. Perhaps, when he proposes his last budget, he will show fiscal leadership and courage, recommending whatever measures are needed to fill gaps. By that time, he may not have much influence over the assembly in any case.
But, meanwhile, voters should keep Andrews' letter in mind when Terry and the Republicans come calling.
Though recent reports indicate that state revenue collections are exceeding earlier estimates and unemployment is inching downward, the picture still is not benign. The impact of federal defense cuts, for instance, has not really hit yet. And school-funding disparity will still have to be addressed.
This year's gubernatorial aspirants should explain precisely how they intend to deal with the future budget problems noted by Andrews. If taxes have to be raised, which ones? If more fat can be cut, where exactly?
Virginians should demand fiscal honesty from their governor, and from his would-be successors.
by CNB