Now considered a scandal in some quarters of the state government for which he has no affiliation Wide-open budget proposal The budget proposal presented by the Finance Minister on February 6 has many of the items that would be considered typical of a development spending proposal that is intended to promote private sector business, investment, and tourism. Some of these include: Spending $11 million on improvements to the Old Dominion Beach Park at the mouth of the Nansemond River and near the popular Battleship North Carolina at Onancock; Spending $25 million in upgrades to a visitor center at Historic Jamestown; Up to $20 million for renovations at various state-owned parks; Spending $15 million to create a new Hampton Roads Tourism Board; and Money for “state parks, state historic sites, parks, scenic roadways, historical sites, cultural sites, museums, and state-owned properties throughout the state.” The budget proposal also seeks to maintain the status quo in terms of current local taxes: $10 million for local governments, down from $21 million in the current budget year; $14 million for community college tuition for in-state students, an increase of $2 million over last year; $24 million for public universities for capital improvement costs, a $5 million increase; $37 million to pay off debt, down from $63 million; and Spending of $11 million on transportation (roads, bridges, other transportation infrastructure). Other aspects of the proposal would affect the general populace. The budget proposes no increase in employee compensation; instead, that increase is to be achieved by a reduction in the employer share of pension costs. State workers would lose their current defined benefit plan in favor of a defined contribution plan. It would save the state government $20 million in the current budget year and $65 million in each of the next two years. The proposal, however, would also eliminate $1 billion in pension liability, and also eliminate the current defined benefit plan. The budget proposes that a $6 million grant is made available to the University of Virginia for a new public outreach and enrollment center, and an additional $2 million is allotted for a new “innovation center” for the Portsmouth Navy Base. The proposal also includes $10 million for a “sustainable communities partnership program” (i.e. Smart Growth) to be used by local jurisdictions. Spending increases of $27 million for environmental protection and conservation measures, including $10 million for the North Carolina Coastal Reserve and $10 million for local water authorities. The budget, of course, does not begin to pay for the state’s current obligations, which include not only the unfunded pension liability, but also billions of dollars in unpaid debt incurred in the booming dot-com bubble. The budget proposal also suggests that the state is not planning to seek a reduction in its income tax, though it acknowledges that the recession could cut future revenue from sales taxes and personal income taxes. The proposal, like that of the fiscal year 2010 budget, is vague as to how new funding might be secured. It says that “a modest property tax reform plan, as has been proposed over the past several years, may be considered in the upcoming legislative session if necessary.” In a nod to the concerns of fiscal conservatives, the budget does eliminate the state share of education aid for low-income school districts. The budget as written will likely pass in the General Assembly, but one can hope that it will not be taken as the usual “business-as-usual” budget with minor modifications. The budget includes major reductions in local government funding, for which some local legislators and voters will be watching very closely. About the Author Jeff C. Bale is the author of “Virginia’s Biennium,” a blog that looks at the politics behind Virginia’s budget and laws. He also writes The Daily Press. Related Comments […] Governor’s budget proposal to close a $1 billion budget shortfall that has contributed to the state’s credit downgrade and is forcing schools and local governments to cut public safety, schools, and services, it includes money to establish a new tourism authority, a tourism “information center,” a new Old Dominion beach park, and other tourism-related projects. See this story on The Commonwealth Foundation website for details. […] […] by a state that doesn’t plan to make income tax payments. And, it has proposed a controversial “sales tax holiday” so that consumers can buy products in Virginia from March 23 to April 27 that are currently priced […] at 30% to 70% less than the same items in neighboring states like South Carolina, Pennsylvania, Georgia and Tennessee. I won’t be surprised if Governor Perdue is able to sell this proposal to the General Assembly. A.I.U. In one sense, Perdue should take great comfort in the fact that the state is getting nothing close to what the federal government is giving the states in the form of entitlements. It’s much worse than anyone realizes. Our legislature has yet to do anything meaningful to tackle the state’s exploding pension costs (more than $10 billion over 10 years) and escalating health care costs. There are over 150 school systems who have been funded in the General Assembly’s budget since 2004, and those costs have skyrocketed as a result. The federal government is paying for roughly one-third of the General Assembly’s budget. Even more scary is the bill the General Assembly approved in December – to tax us for funding the federal flood program. While I think that funding public parks, etc, in Virginia is a good idea (though I don’t have a problem with the state providing the funding), I have serious problems with the proposal because the General Assembly hasn’t managed to get budget figures right for 2 years in a row (budget figures are for 2010). They are going to need to do so again this year. A lot of the numbers are off or will change between when the estimates are formulated and when the actual spending takes place.