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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.

Warner must broker a budget deal

By Preston Bryant
MARCH 15, 2004

Well, it happened. Again.

The General Assembly – for the second time in four sessions – completed its annual meeting without taking final action on the biggest public policy issue before it: the state budget. The legislature’s 60-day session ran out on Saturday with budget negotiators from the House of Delegates and Senate still miles apart from a compromise on their respective chambers’ wildly different spending plans.

This is, frankly, the predictable end to a story that started before Christmas. It was in mid-December when Gov. Mark Warner, a Democrat, sent to the GOP-dominated legislature his notion of what the state’s next two-year budget should look like. He proposed a $59 billion plan, which included a $500 million a year tax increase, or a billion newly extracted bucks from taxpayers over the biennium.

When the General Assembly rode into town in early January, the House rejected out-of-hand Warner’s budget, considering it too rich, and proposed its own $58 billion plan, which was balanced by lots of cuts as well as a few hundred million in increased revenues. The Senate, however, saw the governor’s budget as too poor and moved to pilfer from taxpayers nearly $4 billion more in new levies. The Senate’s biennial budget totals some $62 billion.

So for the past month or so, it’s been known we’d have two proposed Assembly budgets with sizable differences, and there’s been constant talk of a House-Senate standoff. The governor, having seen his original budget scuttled, has been content to sit on the sidelines and watch warring Republican legislators go at each other over the purported inadequacy of the House’s modestly increased budget versus the Senate’s grossly fattened one.

Since January, the two legislative bodies passed more than 1,700 bills and resolutions of the more than 3,000 introduced. Scores upon scores of these were passed in different versions by the House and Senate and were then successfully negotiated and approved as compromises. All of this was done within the allotted 60 days. Preparing a budget, however, proved too much to negotiate and pass without the legislature going into overtime.

The last time the House and Senate were in a budget stare-down was 2001, when negotiators could not agree on mid-way amendments to the two-year spending blueprint. The great divide between the two bodies was on the appropriate level of car-tax cut. Tempers flared, names were called, and longtime working relationships were harmed. Delegates and senators left Richmond without common agreement, leaving then-Gov. Jim Gilmore to amend the budget himself. It was not the legislature’s finest hour.

After that less-than-pleasant experience, most Republicans, Democrats, and pundits look back and conclude that perhaps it all could’ve been avoided had Gilmore stepped in and brokered a deal. Indeed, if only he had then we’d not have had the precedent set of lawmakers leaving the statehouse with a budget unresolved.

Much more at issue in today’s standoff, as it was to some extent in ’01, is this two-part fundamental question: How big should state government be, and how much should it cost?

The House, as determined by its sizable Republican majority, believes government should grow no more at all, and that meeting basic services requires only about a half-billion dollars more beyond the $1.8 billion the treasury has grown over the past year through a naturally expanding economy. The GOP-led Senate would say that it, too, believes in a limited government, but that the current stream of revenues is insufficient to properly fund the state’s core services as well as meet the many promises made over the years, including the phasing out of taxes on cars and store-bought food. That body, as determined by a sizable bipartisan majority, opted for $4 billion in new taxes beyond what economic growth has dumped of late into the state’s coffers.

The breadth and depth of the philosophical chasm between the House and Senate is matched only by the staggering dollars involved. A resolution – a spanning of the gap – will not be easily achieved. That’s why Warner needs to do what Gilmore didn’t – he needs to become engaged and broker a deal.

We’re in this spot for both practical and political reasons. As a practical matter, the two proposed budgets are just so darned different. Not only are the numbers so very far apart, but the underlying budgetary policies and concepts that produce those numbers are worlds apart. And as a political matter, the Senate, having produced a budget built on the biggest tax hike in the nearly four centuries Virginia’s been in existence, will find it very difficult to crawl away from it in any face-saving way. Once you go out that far, you’re stuck.

The only way to wiggle out of this situation anytime soon is for Warner to step in and show the way. The governor should send to legislators a new budget that gives everybody something to crow over. His revised budget should recognize the cuts made by the House along with some of the revenue generators that seemingly would be agreed upon by both the House and Senate, such as slight hikes in various “sin taxes” and user fees, a phasing out of some overly generous income tax deductions, and the elimination of some businesses’ long enjoyed sales tax exemptions.

In addition, the governor’s new budget must maneuver around the Senate’s demand for new personal income tax brackets and a one-cent sales tax increase, neither of which the House will approve. Warner will have to push the Senate to abandon its personal income tax hike, while bringing the House around to a half-penny boost in sales taxes. And, if the numbers work, some additional progress should be made toward fulfilling the politically popular promise to eliminate the car tax, upping its phase-out from its current 70 percent to, say, 80 percent. That’d give all parties – Warner as well as House and Senate leaders – something to brag about.

It’s been said that state budget negotiations are more a game of chess than checkers, more about gently cornering your opponent than embarrassingly drubbing him. Likewise, getting out of this jam is going to be more about three-way compromise than any one player claiming all-out victory.

Governor, show us the way.

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