ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, March 21, 1996 TAG: 9603210010
SECTION: EDITORIAL PAGE: A11 EDITION: METRO
COLUMN: Ray L. Garland
SOURCE: RAY L. GARLAND
WHEN THE tide turned in favor of the allies in World War II, a famous broadcaster would begin by saying, "Ah, there's good news tonight." The good news on state spending in the '90s is that after years of rapid growth, it is settling down to a steady increase of less than 6 percent a year, which is something close to population growth plus inflation.
While several factors causing that slower growth could be given, the lion's share of credit belongs to the last two governors, Douglas Wilder and George Allen. Personally tightfisted, they seem to have carried that mindset into budgeteering.
THE BIG PICTURE: Total appropriations for the two years beginning July 1 are $34.8 billion. But this includes federal money, tuition payments at state colleges and road-user taxes dedicated for transportation. The state's general fund, coming mainly from the sales tax, the income tax and lottery profits, is less than half, or $16.7 billion. Leaving out special funds, over which the legislature exercises little control, state spending comes to $1,300 a year for every citizen.
The new budget contemplates borrowing $205 million for construction, continuing a trend of greater reliance on bonded debt. This is causing some concern, and the assembly has created a joint subcommittee on state debt that will report at year's end.
LOOKING BACK: The 1992-94 budget set spending at $29.2 billion. For 1994-96, it was $33.2 billion, representing an increase of just over 13 percent. If the new budget of $34.8 billion isn't increased next year, spending will have gone up by less than 8 percent.
PERSPECTIVE: Before he left office, Gov. John Dalton presented a budget of $12 billion for 1982-84. Over the next eight years, that increased by more than 100 percent! This rate of growth in spending could have been sustained only by massive tax increases in the 1990s.
TAKING CARE OF NO. 1: One of the fastest-growing items in the budget has been spending on operations of the General Assembly itself. Fortunately, that has now settled down to about $21 million a year, plus another $2.2 million for its watchdog, the Joint Legislative Audit and Review Commission. In 1968-70, the assembly got by with less than $1 million a year, and members did without personal offices and staff. Sadly, it has aped the ways of Congress and now seems well on the way to becoming a full-time body.
The legislators' salary of $17,640 a year seems fair. But they now receive $9,000 a year for office expenses and may spend up to $17,700 employing an aide. For the first time, these aides will be treated as regular state employees, eligible for health insurance and retirement benefits. The legislature also has spawned several permanent commissions on which the sun, apparently, will never set. These now spend almost $1 million a year.
THE BIG TICKETS: Of course, the big money goes for public schools, state colleges, Medicaid and transportation. Direct state aid to local schools will amount to $6.6 billion in 1996-98, or almost 40 percent of the general fund. This is an increase of $500 million from the current budget and $1.2 billion from the one before that. But total spending on public schools in 1996-98 will be at least $15 billion, or about $7,500 a year for each student.
Medicaid, which began in Virginia in 1970 with a budget of less than $100 million, will consume $2.3 billion in the first year of the new budget. But the remarkable thing is it expects to spend no more than that the second year.
It would seem that state and federal efforts to introduce managed care to Medicaid is bearing fruit, though some would call it rationing. Still, Medicaid spending for 1996-98 of $4.6 billion - if it holds - will be $1 billion more than was spent as recently as 1992-94. About half of what the state dispenses under Medicaid is paid with federal funds. All this might support a conclusion that while the poor remain poor, they help others get rich.
Medicaid actually dwarfs money going directly to the poor. The new budget projects spending about $600 million for welfare - little changed from 1992-94. About two-thirds of that is met by federal grants.
With all the talk of getting tough on crime the past several years, you might have thought spending on corrections would have exploded. Not quite. The new budget contemplates just under $1 billion to operate adult prisons. For 1992-94, it was $825 million. For juvenile facilities, the increase is somewhat greater. That went from $215 million in 1992-94 to $290 million in the new budget.
In a welcome departure, $100,000 was appropriated to study contracting with a private company to operate a new 225-bed juvenile facility. The legislature also added $4 million to employ 70 more juvenile probation officers.
NEGATIVE GROWTH? While the legislature decides only the broad outline of spending highway trust monies, it is included in the budget. For 1996-98, the Virginia Department of Transportation will dispense $3.9 billion for roads and just under $200 million for rail and public transit. This has changed very little from 1992-94, suggesting an actual decrease in resources for road construction and maintenance.
The axis of roadbuilders, truckers and local officials would dearly love an increase in the gas tax, and may get it as soon as Allen leaves office.
Ray L. Garland is a Roanoke Times columnist.
LENGTH: Medium: 95 linesby CNB