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

Processing money

By PRESTON BRYANT
DEC. 29, 2003

The House of Delegates and Senate of Virginia are as different as night and day. It's a fact to which even the most casual statehouse observers will attest.

But if there's one thing the two bodies do have it common, it's the pride each takes in its own institutional history and prerogatives, especially as such are embodied in their distinct rules and procedures for conducting legislative business.

So it was no surprise that when Gov. Mark Warner presented in mid-December his hot-off-the-press budget to a joint meeting of the House and Senate committees charged with money matters, some folks -- namely, the House members -- were a bit at odds with his spending blueprint.

You see, Warner wove quite intricately every element of his much-ballyhooed tax-reform proposal into the nearly $60 billion biennial budget he unveiled for the first time a couple of weeks ago. To most, that might seem a perfectly reasonable thing to do. After all, why shouldn't he tie together with one big red holiday bow his entire revenue-and-spending plan? Indeed, wouldn't that be the best way to see how his tax-reform plan meshes with his budget priorities? Don't most household checkbooks show both deposits and debits?

Well, theoretically, yes, the way Warner presented his tax-reform plan -- which, by the way, is a $500 million a year tax increase -- and budget proposal would seem like a common-sense approach to take. Trouble is, it doesn't reflect the General Assembly's traditional budget process, at least not entirely. It doesn't jive at all with the way the House operates, though it does work within the Senate's way of doing business.

You see, the House and Senate have two different processes established for considering measures to collect and spend tax dollars. In the House, those functions are split between two very different panels. The House Finance Committee is charged with handling all matters of tax policy -- they decide just what property and commercial activity is taxed and at what rates. It's the House Appropriations Committee, however, that's responsible for assembling the state's budget, detailing what goods and services state tax dollars will be spent on.

These two House committees work in tandem. One decides how much money will be coming into the treasury, while the other plans how it'll flow out of Richmond's coffers. And each committee respects the other's role in the budget process.

It all works much differently (some might say more simply) in the Senate, however, where there's only one committee -- its own Finance Committee -- that handles both the revenue and appropriations sides of the ledger. The Senate, quite honestly, will have little problem with the way in which Warner wove together his revenue and appropriations proposals.

So what is it that happened when Warner and his numbers-crunching team stood before the jointly assembled House Finance Committee, House Appropriations Committee, and Senate Finance Committee to offer up his taxing and spending plans for the 2004-06 fiscal years?

House members immediately questioned the propriety of Warner putting forth what's supposed to be a pure appropriations bill -- his proposed budget -- that's riddled with tax policy. It was a move that, to some, smacked of disrespecting the House's two-committee budget system.

It wasn't the governor, though, who got the questions on this; it was his nimble secretary of finance, John Bennett.

Leading the charge was Del. Steve Landes, a Republican from Augusta County who's the incoming chairman of the House Republican Caucus. His pointed questions to Bennett were the very ones quite rightly on many other delegates' minds.

How, Landes wanted to know, did the governor come to mix tax apples with budget oranges in a single legislative proposal to be given to a House that'd always kept them separate?

No one can honestly say that the way in which Warner intermingled revenue matters in the budget bill is totally foreign. As Bennett noted to his inquisitors, when the state first began receiving hundreds of millions in revenue from the national Master Tobacco Settlement a few years ago, those incoming funds were dispersed in a proposed spending plan. There are also the various "fees" for everything from drivers' licenses to DUI fines that in the last year or so have been set or raised in the appropriations act.

What is unprecedented, however, is a governor offering up a relatively far-reaching overhaul of the tax code and proposing to send it through the General Assembly -- specifically, the House -- by way of the appropriations process. Delegates on the Finance Committee didn't take too kindly to that move, nor, for that matter, did Appropriations Committee members.

To be fair to Warner and Bennett, though, they also have prepared stand-alone pieces of legislation setting forth the details of the governor's tax-reform plan that'll be sent, appropriately, to the House Finance Committee.

Which is good. Because House Appropriations Committee chairman Vince Callahan informed both Warner and Bennett that he'd be stripping out of Warner's proposed budget all elements of the governor's tax-reform plan, thereby restoring the appropriations bill to its purest form. Callahan, a Fairfax Republican, is a 35-year legislative veteran who's a staunch defender of House traditions, processes, and prerogatives.

Callahan's move is in keeping with the House's traditional approach to budgeting. The Appropriations Committee, after all, is charged with assembling a budget based on projected revenues to be produced under a tax code as it exists at the time the budget process begins. It's inappropriate to build a budget around a tax-reform plan that may or may not be approved.

While the Senate, with its sole Finance Committee to handle both tax and budget matters, will still have before it Warner's combined tax-reform and appropriations proposal, Callahan's actions to split up the House version of the governor's plan may present Warner with an added hurdle. By forcing Warner's controversial tax-reform package to stand on its own legs before the House Finance Committee, the governor will have to convince an already skeptical panel of the plan's merits. In addition, House Speaker Bill Howell, a generally anti-tax-increase Republican from Stafford County, will have several vacancies to fill on the Finance Committee -- and he probably will appoint legislators who share his dislike for Warner's $500 million a year tax hike.

Yes, the General Assembly's budget process is a rather Byzantine one, especially to those who only casually follow it. The old adage comparing the making of laws to the making of sausage can certainly be extended to the legislature's processing of money.

But it is a process that has worked surprisingly well over the years, and it's rooted in historic -- some might say archaic -- House and Senate traditions and procedures that have withstood the test of time.

Now, this process is itself is a test that Warner's tax-reform and budget proposals will have to overcome.

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