Modest State Budget Surplus May Allow Bonus; Transportation Plan Far Short

WCVE Public Radio HD. Jeff Schapiro joins us now from the Richmond Times Dispatch for his weekly analysis of Virginia political news. Good morning, Jeff.

Schapiro: Hi, Wayne. Welcome back.

Thank you. Well, we learned this week that the battered state budget may end the fiscal year with a modest surplus, which would be good news for state workers.

Schapiro: Ah, yes. Modest is the operative word. But it would be enough to cover this three percent bonus for state employees, this one time three percent bonus for state employees. They’ve gone about four years without a pay raise. You know, in this factory town we know as Richmond this is presumably relatively good news, though there have been a lot of layoffs in state government and there will probably be more. So, it is a very mild, very modest salve. But there were some other signs that perhaps things are improving in the economy. The liberal Commonwealth Institute for Fiscal Analysis rolled out a report this week that suggested the $9 billion or so or about a third of the $9 billion dollars or so in Obama stimulus funds that has flooded the state, that are flooding the state, have actually contributed to some stability within the economy. The Institute says, again, that it’s about $3 billion in direct aid, most of it going to the working poor, the unemployed, and seniors.

And there was a report that Medicaid funding could take a hit in Virginia.

Schapiro: There’s about $400 million in anticipated Medicaid funds that is trapped up in Congress, largely because of the inaction of the House and Senate. These dollars have been woven in an odd way into the budget; they are supposed to offset some anticipated reductions. But what makes this very tricky is that some of those reductions may be contrary to federal law, so the Governor has said he’s gonna use some of his administrative powers to move around dollars to prevent these further losses. However, this has raised a number of eyebrows, particularly within the Senate finance committee, where there are a lot of Democrats who worry about what the government is doing -- or not --, to provide for the healthcare of those less fortunate than ourselves.

To help the Commonwealth close its books at the end of the fiscal year June 30th in the black, retail merchants are being asked to accelerate their sales tax payments to the state.

Schapiro: And not the first time this has occurred. It was an idea that was discussed a number of times back in the 80’s but never actually enacted. Governor Warner in a handoff from Governor Gilmore did this back in 2002 as I recall, the idea is to get these retailers, many of whom are hurting because of this lousy economy, to front the state some extra dollars to “help” with, I guess, budget-balancing. We’re talking about $227 million, and this is from the largest retailers, those with sales exceeding a million dollars a year.

The Transportation Board passed a six-year plan which falls far short of what is needed even to maintain existing roads at the needed level, much less any expansion of the road system.

Schapiro: Yes, the Transportation Board approving about half of what the state really needs. That total ideally would be about $700 million. Of course this is a reminder of the enormous pressure on the legislature and this new governor to come up with dollars for transportation. And one idea Bob McDonnell has in mind, of course, is to sell off the state’s liquor monopoly. It’s not clear how much money that would really generate, but even before the Governor has even put a plan on the table there’s a lot of opposition building, particularly within the Democratic-controlled Senate, and as far as the Democrats are concerned, pick a metaphor, this is akin to “killing the goose that laid the golden egg,” “selling off the family silver,” or “giving away your seed corn.”

Governor McDonnell is going to be out at the Homestead for, what would you call it, a retreat with some of his advisors and supporters.

Schapiro: Well, senior staff, most members of the Cabinet and some very big check-writers. It’s kind of an interesting contrast with something Ken Cucinelli, the Attorney General, did earlier this week. He, the A.G., is kind of tending to the grassroots, talking in an online chat about his healthcare lawsuit. By the way, a group of doctors would like him to withdraw that suit. Meanwhile Bob McDonnell is up in the high country hanging out with a bunch of people whose primary concern, at least this weekend, may be greens fees. But this is certainly a reminder of the contrasts that make up the Republican party, a conservative, activist, folks to whom Ken Cucinelli appeals, and corporate benefactors, the folks to whom Bob McDonnell appeals.

I have just 30 seconds to ask you about the death of the State Tax Commissioner.

Schapiro: Janie Bowen, a State government lifer, spending her entire working life in the employ of the Commonwealth, dying very suddenly following a traffic accident, so there seemed to be some concerns about the conditions under which she died. There are some of us who cover state government, there are some who work in state government, who have tax studies that she conducted as a graduate student at the University of Virginia.

Our time is gone, Jeff, so I’ll talk to you again next Friday at this time.

Schapiro: Happy Father’s Day.

Thanks to Jeff Schapiro.