The first thing that a family should do while preparing a budget is to decide what is the most important thing their income should cover. This is also true in government. Just as you do not plan on going out to an expensive restaurant before you pay the power bill, state government should not plan on starting new programs before properly funding core services.
Last week was the time for the full Senate to consider the Finance Committee’s proposed adjustments to Governor Kaine’s budget.
In the past, proposed changes to the budget have largely been a non-partisan undertaking in the State Senate. This year that was not the case. Emboldened by their new majority, the Democrats wrote a budget with little input from Senate Republicans. The budget they developed sets us on a financially irresponsible course.
The Democrats want to take a major part of Virginia’s “Rainy Day Fund” and use that money to help fund the current budget. This fund was created to serve as a last resort when the economy stalls and revenue for funding core government services is in doubt.
Unfortunately, the Governor and the Senate Democrats decided to raid the rainy day fund this year despite the fact Virginia’s economy is still growing; just not as fast as the Governor had hoped. Senate Republicans have put several options on the table to cut costs and preserve this fund for real emergencies.
Likewise, going into the next year, the new budget, as presented, relies on overly optimistic projections. Senate Democrats have based their budget on a 6 percent rise in personal income with the year, starting July 1st and a growth of 7.6 percent in 2010. By basing the budget on questionable assumptions, Governor Kaine almost ensures we will face budget shortfalls again next year.
Their budget also relies on $44 million more in lottery profits than the Lottery estimates. If these projections do not materialize, then we will all be forced to face the consequences of these mistakes in the future.
While creating new programs, the budget also reduces core services, such as cutting education by $43 million (local government will be expected to pick up the shortfall) and cutting $82 million in reimbursements to hospitals and nursing homes. These cuts are shortsighted because they cost us another $82 million in matching federal dollars.
Overly optimistic revenue projections, excessive borrowing, large withdrawals from the “Rainy Day Fund”, higher taxes, and cuts to core services while starting new programs and expanding others is not a fiscally responsible budget.
Now the Senate and House budget writers will sit down and hopefully common sense will prevail and compromises will bring about a responsible budget that I can support.
I want to hear from you on what you think about this and other issues before the General Assembly.
I can be reached by phone at either 1-800-889-0229 or directly at my office at 804-698-7515. You can go to my website www.FrankMRuff.com and click on the “Contact Us” button or you can email me at district15@sov.state.va.us. You can mail letters or notes at P.O. Box 396, Richmond, VA 23218. You can also fax me at 804-698-7651.