Arthur says “Spending is up by $2.5 billion, not down by $6 billion.”
Below are rebuttals to Fairfax County Taxpayer Alliance criticisms of Governor Warner's State of the Commonwealth address, of January 14, 2004. FCTA responses to the rebuttals are included.
The original FCTA evaluation of the Governor's address is located on the Fairfax County Taxpayers Alliance website, www.fcta.org
The evaluation of Governor Warner's address was written by FCTA president, Arthur G. Purves.
Purves: The response confirms that my statement is true.
I did consider inflation, enrollment, and population. This year's General Fund budget has $2B more than needed to keep up with population, enrollment, and inflation since 1996.
I also considered the car tax cut, which accounts for $1B.
The response ignores the surge in revenues and spending regarding the dot-com bubble (FY1996-FY2000).
It also says that most of the increase is due to accounting changes in the Non-General Fund side, a point not important enough to be mentioned in slide 13.
Even if only the General Fund is considered, General Fund spending has increased $.5B since Warner became Governor; it did not decrease by $6B.
The response ignores the destructive influence of welfare on families and the ineffectiveness of public education.
The response also ignores the assertion that prisons are full of the casualties of the failed public education and welfare systems.
Transportation is underfunded because no income taxes are spent on transportation. Welfare and education monopolize income tax revenues. Therefore while inflation-adjusted education and welfare funding grows faster than enrollments and population, funding for the Department of Transportation barely keeps up with population and trails vehicle-miles traveled.
Purves: So my statement is true.
The response does not address how much agency spending increased during the dot-com bubble.
I would like to see agency spending in FY1996 (before the dot-com bubble), FY2000 (at the end of the dot-com bubble), and FY2002 (when the alleged reductions occurred).
The Governor's $1B tax hike restores most of the positions that were eliminated.
Purves: The response implicitly confirms my statement. For the 35 percent who pay higher state taxes, there is no claim that their local taxes will decrease. For the other 65 percent that allegedly pay lower state taxes, the response allows the possibility that their local taxes will increase. In fact the Governor authorizes counties to raise cigarette taxes.
The 65 percent figure ignores the cigarette tax hike. Also, we just had a cigarette tax increase in the form of the tobacco settlement, where the proceeds went to lawyers and state governments. This settlement gives Virginia an extra $120M per year, almost as much as the $140M the Governor gets from raising cigarette taxes (again).
Cigarette taxes are regressive. If the Governor's wants to reduce smoking, he should make the cigarette tax hike revenue neutral by reducing (not increasing) sales taxes.
The car-tax phase out would result from higher taxes elsewhere.
Purves: Again, the response, by trying to justify why school spending increases faster than enrollment and inflation, confirms my statement.
The Governor's budget increases public-school spending next year by 8 percent, compared to an expected 1.5 percent inflation increase and historical increases in enrollment of 1.5 percent. The spending increase is excessive, especially when the Joint Legislative Audit and Review Commission (JLARC) reports that inflation-adjusted public school spending has been increasing nine times faster than enrollment.
The Wilder Commission said that benefits for government employees are far more generous than private-sector benefits.
Many of the schools' special needs are the result of not employing phonics-based instruction for teaching reading. Children who cannot read become "special needs" students. Public schools have a conflict of interest because the more special needs students they can identify, the more money they can demand.
Also, how can colleges be "chronically underfunded" when the JLARC reports that inflated public-college budgets have increased more than three times faster than enrollment?
Purves: The response does not deny my statement that Virginia has indulged in excessive bond sales.
Moody's is not going to tell Virginia to sell fewer bonds. There has been plenty of revenue for infrastructure (transportation). However the revenue has been monopolized by soaring public education and welfare spending, since income taxes (the major source of General Fund revenues) are off-limits to transportation and by default go to education and welfare. Also, only 12 percent of sales taxes are "dedicated" to transportation.
The Governor has admitted that during the current biennium he has raided about $500 million from transportation for schools and welfare - $317M from "dedicated" transportation sales tax revenues and $200M from insurance-premium taxes that had been "dedicated" to transportation.
The depletion of the rainy day fund is due to out-of-control spending.
Purves: Again, the response explains why my statement is true.
Because consumption taxes are not applied based on income, consumption taxes affect the poor as much as the rich. This hurts the poor more, because they have less discretionary income. When Governor Warner spoke to the Fairfax County Chamber of Commerce at Wolftrap, he defended his increase in the regressive sales tax by saying that poor people should pay more taxes since they use more government services.
Governor Warner's tax hike is an attempt to win the Virginia Education Association's support when he runs for senator against George Allen. Of Governor Warner's $1B increase, $774M goes to the already-overfunded and mismanaged public schools.