politics@roanoke.com / Preston Bryant

Preston Bryant is a Republican who has represented Lynchburg and part of Amherst County in the Virginia House of Delgates since 1996.

It’s been a week since the polls closed, when all 140 seats of the House of Delegates and Senate were up for grabs. And not much changed in the legislative balance of power.

Republicans still rule all around. Minority-party Democrats retained their not-so-prized title in both chambers. In the House, they did manage to pick up three seats, bringing their numbers to 37 in the 100-member body. In the 40-member Senate, however, it was the Republicans who added a seat, boosting their majority to 24.

That which also changed equally little was the continued “debate” on the need for reforming the state tax code. Not much was said about the matter before the campaigns heated up, and precious little more was said about it even after office-seekers took to the stump in earnest.

But that’s no surprise, really, since neither Gov. Mark Warner, a Democrat, nor the GOP-led legislative commission looking at revamping the tax code moved to put their ideas on the table for a good old-fashioned political debate. So voters were left in the dark on a major public policy matter that’ll certainly be at center stage when the new General Assembly convenes in January.

The only significant tax-reform salvo launched before last week’s elections came a few days before voters went to the polls. That’s when powerful House Speaker Bill Howell, a Republican from Stafford County, underscored the GOP’s position -- lest any Virginian really be in doubt -- that taxes would not go up, on balance, under his watch. Tax reform, said Howell, should not be code for tax increases -- that is, should the tax structure be reformed at all.

To fix the fiscal challenges facing the Old Dominion, Howell argued in a speech before the Virginia Chamber of Commerce’s board of directors, legislators should ride into Richmond in a couple of months determined to restructure the revenue-sharing relationship between the state and local governments. Howell’s right.

As education is the single biggest line item in local government budgets -- not to mention it being an area where the state admits more money is needed -- Howell also called for a new state-funded program to build schools. Doing so would relieve pressure on local real estate taxes, allowing dollars generated there to be spent elsewhere.

What’s less certain, though, is how new investments will be made in, say, Medicaid and transportation, two areas of the state budget that are woefully inadequate. Medicaid alone requires hundreds of millions of dollars just to meet what the federal government lays out to be Virginia’s minimum state share. And in a few years, transportation will soon be without any money at all for new road and bridge construction -- that’s right, zippo -- as maintenance of existing highways and such will eat up VDOT’s budget. And what about higher education, homeland security, natural resources, and public safety, just to name a few other areas in need of significant investment?

Another question hanging out there is how Wall Street will assess Virginia’s festering budget malaise in light of election results that gave no clear signal to Warner or legislators on what to do.

You may recall that Moody’s, one of the big three bond-rating agencies, has put Virginia on warning: get your fiscal house in order, they’ve said, or risk having the Old Dominion’s historic triple-A bond rating downgraded.

Some will argue that Moody’s doesn’t really care whether Virginia cuts spending or increases taxes, so long as we return to stable budgeting. But what usually goes unsaid is that bond-rating agencies also look at how well a state is investing in its infrastructure in order to maintain existing businesses and attract new ones. Even an attractive, low-taxing state that’s otherwise failing to improve its colleges and roads, they’ll reason, is one that’s likely to give bond investors cause for pause, thus making it subject to a bumped-down rating. After all, no business wants to relocate or expand operations in a place that takes a dim view toward improving the very infrastructure it’ll have to rely on to train its employees and get its goods to market.

Warner has all but said that if the General Assembly fails to take action on tax reform during its 60-day winter session, he may call legislators back to Richmond in the spring for a special session. The state constitution allows a governor to call the legislature into session any time he or she deems it to be in the best interest of the Commonwealth.

There shouldn’t be a need for that, however, if Warner and legislators move now to do that which should’ve been done long ago. Our tax code and budget structure are in serious need of reform. The timing is right, as both the national and state economies are showing new signs of life.

These are the kinds of discussions that should’ve been held on a grand scale during the just-closed campaign season. Warner chose not to push for a statewide debate, and only a few legislative candidates made any effort to do so. That’s a shame.

So here we are, heading into a legislative session when the new two-year budget will be written, and elected decision-makers will be guided by no discernable mandate. Talk about a prescription for gridlock.

No, tax reform doesn’t need to translate into massive tax increases. Howell’s exactly right on that score.

But a more modern and realistic realignment of what and how things of value are assessed for taxing purposes is the needed first step. Once that’s decided, and after the dust settles around it, then folks can take a fresh look at the adequacy of the various revenue streams flowing to state and local governments that fund those services Virginians want and need.

The 2004 General Assembly session will bring 15 new members to the House and Senate. They’ll be giddy with excitement and awed by the honor of it all.

And then they’ll be shocked into reality when they’ll be able to deliver on virtually nothing they may have been foolish enough to promise.

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