Monday, November 16, 2009
Editorial: A sound bite doesn't tell the budget tale
The dramatic finding of a 73 percent increase in Virginia's budget over the past decade has less impact when considered in its full context.
From the RoundTable blog
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Despite a string of painful budget cuts over the past two years and an unprecedented 10 percent decline in state revenue resulting from the effects of a global recession, there are some who still believe Virginia's government is awash in cash.
Those people may seize on the annual review of state spending by the Joint Legislative Audit and Review Commission.
JLARC found that Virginia's budget grew 73 percent between fiscal years 2000 and 2009 -- a fact that could be put to good use in an anti-tax sound bite. But a full read of the report puts that number in some much-needed context.
For instance, the 73 percent figure doesn't take into account inflation. Factor that in, and the growth is reduced to 41 percent over 10 years -- which some would still complain is too much.
But that figure doesn't take into account population growth -- which increases both revenue and demand for services.
Factor in inflation and population growth, and the state budget increased only 28 percent over 10 years.
Still too much for you? Again, a look at the full report is instructive. Knowing where the budget grew can help determine what priorities were being addressed by the state through budget increases.
As the report notes, "Most of the state budget, as well as most budget growth, is concentrated in a handful of agencies and programs representing core activities of state government."
In fact, just four agencies -- the departments of Medical Assistance Services, Education and Transportation, and the University of Virginia -- were responsible for more than half the budget growth.
Add in three more -- the Department of Social Services, the Virginia Community College System and the personal property tax relief program (the car tax give-back) -- and more than three-quarters of the budget's growth is explained.
Another interesting twist is this: Most of the increase is not in the general fund, which is where the General Assembly has the most discretion.
Non-general fund spending includes things like pass-through payments for unemployment, college tuition payments, child support, etc. Non-general funds also include money from bond issues and fees that can only be spent on related activities, such as the solid waste management permit fee and the game protection fund.
Non-general fund spending increased 50 percent over the 10-year period, adjusted for inflation and population growth. General fund spending, on the other hand, increased only 8 percent.
So, to recap: The sound bite is that the state budget has gone up 73 percent over the past 10 years. In actuality, though, the portion of the budget that the General Assembly has the most discretion over has increased by only 8 percent when adjusted for inflation and population growth.
Remember that when you hear the sound bite.
