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.

Timing is everything, and Gov. Mark Warner knows it.

The budget committees in the House of Delegates and Senate went on separate retreats last week to discuss in some detail the money woes that’ll be facing them when the General Assembly convenes in about six weeks. Members of the House Appropriations Committee spent two days crunching numbers in Williamsburg, while those on the Senate Finance Committee huddled a couple of days in Fredericksburg.

It was in these historic cities that each committee had put before them in numerical black and white that which they intuitively knew: while the state’s economy is beginning to up-tick, the resulting revenue growth won’t be sufficient to cover mandated cash layouts to meet higher Medicaid costs, pay for new students in our secondary schools and colleges, and pay interest on existing state debt, among other things, without additional cuts to existing services that’ll just compound deep cuts made over the past two years.

When budget writers hit Richmond in January to prepare the next biennial budget, they’ll face about a $1.3 billion shortfall, with any new revenue dollars devoured by real and inflationary growth in the most basic areas of government. This predicted shortfall follows a $2.1 billon shortage in the just-closed fiscal year and a $2.3 billion shortage in the one before that, both of which were painfully overcome.

With all of this frustrating news fresh in legislators’ minds, Warner will be making his case for an aggressive overhaul of the state’s tax system. The current one is about a century old and plays more to an agrarian-based economy than a modern one rooted in sophisticated manufacturing, research and development, and financial services.

That Warner, a Democrat, is unveiling his plan just a handful of days after the Republican-dominated budget committees met to receive sobering fiscal news demonstrates a bit of savvy on his part. He’s hoping the legislators will see the wisdom in putting in place a new tax structure that not only will help, in time, correct today’s budgetary imbalances, but will more easily absorb the effects of future economic slumps.

For the past couple of weeks, Warner has been meeting one-on-one with key legislators. These have been less arm-twisting sessions than straight-up discussions on the state’s fiscal challenges. No one who’s sat privately with Warner for a couple of hours can doubt his sincerity in wanting to leave Virginia better off for the next governor, no matter who it might be.

This is not to say, however, that he’s going to have an easy time getting through the General Assembly something as politically dicey as a tax code rewrite. All 100 delegates and 40 senators just came off the campaign trail. Some don’t believe there are any great inequities in the current tax code, and thus think it should be left alone. Some made pledges against any tax-reform plan that isn’t revenue neutral. Some believe the economy will continue to grow and will provide the necessary bucks to meet our needs, no matter how staggering they might be. And some victorious Republican candidates who were targeted by Warner for defeat are now disinclined to help him in any way on any initiative.

Of course, there are also delegates and senators who believe our current tax system is indeed dysfunctional, that demands for revenue neutrality are naïve, that the state’s economy will not return to double-digit growth levels, and that campaign grudges are petty.

The General Assembly is a disparate collection of (mostly) high-minded people. Its mishmash of philosophical thought and political emotions certainly make for an unpredictable outcome to Warner’s tax-reform proposal.

It’s the next few weeks that must be deftly played by Warner. The Thanksgiving release of his tax code overhaul will be a preamble to the mid-December release of his biennial budget. The successful passage of each, in a form pleasing to Warner, will depend to some degree on how successfully the governor creates a nexus between the two. He’ll have to demonstrate clearly to legislators – and equally clearly to the voting public – how tax reform will positively impact the next two-year budget (read: mitigate the pain) as well as those in outlying years.

Put another way, Warner will have to show how the failure to modernize Virginia’s tax structure will hurt us now, next year, and in the future – how tax reform’s failure will keep us behind the 8-ball when it comes to education, healthcare, public safety, transportation, and other costly needs. The strategic value in Warner’s submitting his tax-reform plan and new budget within the same window of time is only as good as the connection he makes between them.

Making this connection should be – and most certainly will be – the nature of Warner’s work for the next couple of weeks and months.

Hanging in the balance of all of this is both Warner’s legacy and his future. More important, though, hanging in the balance is Virginia’s short- and long-term fiscal health.

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