Assembly 2011: McDonnell’s transportation plan clears Senate, VRS proposal rejected
The House and Senate have approved the bulk of Governor McDonnell’s 4-billion dollar transportation plan, but have rejected his proposal for state workers to contribute to their pension plans. Craig Carper reports.
The bill uses over 3 billion dollars in borrowed money to begin construction on 900 road and mass transit projects over the next three years. Democrats in the Republican-controlled House said the plan would burden the state with an unacceptable amount of debt and voted overwhelmingly against it. But the vote yesterday in the Democratic-controlled Senate was a much different story.
Democratic Senator and Majority Leader Dick Saslaw of Fairfax.
Saslaw: I’m gonna vote for this bill, but there’s some good parts to this bill and there are some parts that are a problem down the road.
Why do this? Well, number one, interest rates right now, they’re at a historical low. The other thing is, it puts an awful lot of people back to work when right now we have a very high unemployment rate even though we are far beneath the national average, and it's gonna run us 227 million dollars a year for debt service, and that's a lot. When all is said and done, for 3.18 billion dollars we will have spent 5.6 billion dollars. So we would have spent approximately 2.4 billion dollars in additional interest to pay all this off.
On the whole, the bill does more good than it does harm. The biggest plus is it puts an awful lot of people back to work. The bids are coming in low and the interest rates are low and we need to put people back to work; that’s the biggest plus. The biggest minus is that if something happens on an emergency basis, we’ve bought the farm.
The bill ultimately passed on a 34 to 6 vote with broad bipartisan support.
Governor Bob McDonnell said he was thrilled with the results.
McDonnell: The General Assembly has been very receptive. Why? Because they understand we’ve got a problem now, they want to create jobs now. We have the best interest rates and the best deals in modern Virginia history. It’s a good business decision for our taxpayers. I’m very pleased with the progress. We’ve still got a little work to do in the budget and on the bill in order to reconcile some of the differences, but I think the good news is that with bipartisan cooperation and leadership, we’ll have the largest new influx of cash into transportation in a couple of decades and I realize that there's still some things that we'll need to do in the future; while this is a good start, that we’ve got some other things that we’ll have to look at over the next year or so to create some sustainable revenues, for particularly our traffic-clogged regions of the state. But I think this is gonna be a tremendous boost for job creation and some of those projects that have been delayed and we’ve made excuses about for years, we’re gonna be able to get started in the next year because of this package.
In other news, the House and Senate money committees have effectively rejected Governor McDonnell’s recommendation that state employees begin to pay five percent of their salary into their pension funds. The House did so by accepting state workers' five percent contribution, but offsetting it with a five percent salary increase, while the Senate rejected McDonnell’s proposal outright.
The Governor said he was disappointed by the money committee’s decisions.
McDonnell: I know that there is broad appreciation for the fact that our pension system is woefully underfunded, that we’ve got nearly an 18 billion dollar unfunded liability that’s gonna get worse over the next four or five years and no bull market's gonna make this up. It’s been tough to convince, frankly, both our state employees and the legislators, that to create a long-term fix that there’s going to have to be some shared responsibility and by that I mean the state employees should pay some small amount and the state’s gonna have to put in some additional revenues. I did both in the budget. The General Assembly put some more money in from the state but didn’t require anything out of the state employees. I understand that maybe an election year had something to do with it, but I do think if we’re going to be able to look our state employees in the eye and promise them that the significant benefits are going to be there for them when they retire, we’ve got to do more for them than what’s been done so far. I’m going to keep pressing them to create a long-term sustainable solution because what’s happened so far is not it.
Currently, Virginia is one of only four states to pay both the employer and employee share of their pension contributions.
Craig Carper, WCVE News, Capitol Square