File and Press Archives‎ > ‎Press Releases‎ > ‎2004‎ > ‎

2004-02-14 Misleading statements in Governor Warner's State of the Commonwealth address

Governor Warner on taxes

Governor Warner: "Some will say we should cut spending. I agree, and we have done so. … We have closed the largest budget shortfall in Virginia's history - more than $6 billion."

Fact: Spending is up by $2.5 billion, not down by $6 billion. Since Governor Warner took office in January, 2002, state spending has increased by $2.5 billion, from $23.5 billion in FY2002 to $26 billion in FY2004. Governor Warner had wanted to increase FY2004 spending by $4.5 billion instead of $2.5 billion. He also wanted to spend an extra $2 billion in FY2002 and FY2003. Since 1998 Virginia spending has increased by $4 billion more than needed to keep up with population growth and inflation.

Governor Warner: "We have reduced state agency spending by 20% on average. We have eliminated more than 50 agencies, boards, and commissions - and thousands of positions in state government."

Fact: Governor Warner reduced the number of state employees by three percent, far less than the 20 percent reduction he cites. Most of the positions he had cut are restored in his proposed budget. Salaries for state government positions account for only about a third of the state budget. Overall spending increased.

Governor Warner: "Doing nothing means the state will continue to pass the buck to local governments who will have to raise property taxes - and that just isn't fair."

Fact: Either way, taxpayers will have higher taxes, either higher state income and sales taxes or higher local real estate taxes. What is more likely is that local taxes will still increase even if state taxes increase. The only way to cut taxes is to cut wasteful spending.

Governor Warner: "In education, 100,000 more students will enroll in our public schools by 2010."

Fact: What this statement overlooks is that public school spending has been increasing much faster than enrollment. According to the Virginia Joint Legislative Audit and Review Commission’s report, Review of State Spending: December 2003 Update, Virginia inflation-adjusted spending for public schools has been increasing nine times faster than enrollment. If inflation is included, public school spending has increased nearly twenty times faster than enrollment.

Areas of waste in public schools include the failure to teach phonics-based reading instruction. This failure perpetuates the minority student achievement gap. It also results in many children being unnecessarily stigmatized as "learning disabled", when in fact they simply were not taught properly. Public schools have a conflict of interest in that the more special needs and learning disabled children they can identify, the more money they can demand.

Another area is guidance counselors, social workers, and psychologists. Since the advent of elementary school guidance counselors in the late 80s the number of Fairfax County Public Schools students recommended for expulsion has increased 100 times faster than enrollment (2300 percent compared to 26 percent). Counseling programs are not working. Virginia should instead address the real causes of deteriorating behavior such as Hollywood, the destructive influence of welfare on families, the pressure put on mothers to choose careers over children, and the schools’ so-called "progressive" curriculum.

Other areas of public school waste are excessive use of computers, excessive administration, and magnet programs that would not be needed if the there were a better curriculum in the regular classroom. The only way to improve public schools is through school choice.

Governor Warner: "In higher education, 61,000 more students will seek to enroll in our colleges and universities during this decade - at the same time that tuition is rising …"

Fact: Again, the governor does not acknowledge that college spending has been increasing much faster than enrollment. According to the JLARC report cited above, inflation-adjusted budgets for Virginia four-year public colleges have been increasing more than three times faster than enrollment. Also only 65 percent of freshmen at these colleges graduate within six years.

Governor Warner: "For example, our Medicaid program is among the leanest in the nation. And yet, two out of every three patients in Virginia's nursing homes now depend on Medicaid."

Fact: Regarding nursing homes, today only half as many of the elderly live with their children compared to fifty years ago. The elderly cannot be cared for at home when higher taxes drive both husband and wife into the workforce. Also, Medicaid spends $1 billion on welfare families. Welfare, by giving unmarried mothers subsidized medical care (Medicaid), housing, food, and childcare has created an incentive for out-of-wedlock births. Since massive welfare spending began in the 60s under Lyndon Johnson’s Great Society, the percentage of American children born out of wedlock has increased from seven percent to 33 percent. Welfare reform has not reduced the out-of-wedlock birthrate. Single-parent children are at high risk for poverty, academic failure, poor health, and crime. Welfare has devastated African-American families: Two-thirds of African-American children are now born out of wedlock.

Governor Warner: "In corrections, our prisons and jails are already seriously over-crowded, due to parole abolition and tougher sentencing. More inmates require more space."

Fact: The Governor is glossing over the rapid increase in the prison population. According to the JLARC report cited above, Virginia’s prison population has increased during the last two decades almost ten times faster than population growth. This may be due family breakdown caused by welfare. A child born out of wedlock is three times more likely to commit crime than a child born to married parents. According to the Heritage Foundation, Wisconsin, the only state to have investigated the connection between family background to incarceration rates, found that "teenagers of always-single-parent families are 22 times more likely to end up in jail than are those from two parent families" (Heritage Foundation, Issues: 2002, p 172). The high incarceration rate of African-American males is probably due to the destruction of African-American families brought on by welfare. Nationwide, one out of three African-American males goes to prison, compared to one out of 17 whites. However, if these statistics are adjusted for family structure there is no difference between African-American and white incarceration rates.

Governor Warner: "Our budget increases transportation funding by $392 million."

Fact: When he presented his tax hikes to the Fairfax County Chamber of Commerce, the Governor stated explicitly that there was no new money for transportation. Rather what he is pledging is to stop raiding funds already earmarked for transportation, which he has apparently been doing during the last two years. Experience suggests that he will not keep his word unless there is a constitutional amendment preventing raids on the transportation "trust" fund. On Feb. 11, the senate finance committee defeated such an amendment (SJR 18) on a tie vote.

The reason for the transportation crisis is that no income taxes are spent on transportation. Income taxes are reserved for education and welfare. The result, as reported in the JLARC report, is that while public school and public college spending has increased much faster than enrollment, transportation spending is barely keeping up with population growth. What is required to fix the Virginia budget’s "structural imbalance" is to allow transportation to compete against wasteful education and welfare programs for income tax revenues.

Governor Warner: "Together, we won passage of a bond package to upgrade our state parks, colleges, and universities."

Fact: According to the Virginia Campground Association, of the three million dollars raised for the pro-referendum glossy mailers, $2.3 million came from the construction industry, real estate and land speculators who stood to profit from the bonds. The VCA bases this statistic on information from the Virginia Public Access Project.

Governor Warner: "Finally, our budget and tax reform plan preserves our fiscal integrity and protects our AAA bond rating."

Fact: Virginia’s bond rating is at risk due to excessive bond sales. Ten years ago, revenues from Virginia bond sales were four times larger than the debt service paid on the bonds. Now bond-sale revenues are about the same as debt service costs. New bonds should not be sold until all old bonds have been paid off. However, Virginia is selling bonds every year.

Governor Warner: "To me, it just doesn't make any sense that someone earning only $17,000 a year in Virginia should pay the same tax rate as someone earning $500,000 a year."

Fact: However, the Governor’s plan has those making $17,000 per year paying the same higher sales tax as those earning $500,000 per year.

Governor Warner is not reforming taxes. He and Senator John Chichester are trying to raise taxes to subsidize harmful, out-of-control spending. They are raising taxes for insensitive government programs that perpetuate class differences, unnecessarily stigmatize children as "learning disabled", foster unsafe schools, destroy families, and multiply the number of felons. Virginia would have better schools, stronger families, and less crime if taxes were lowered, welfare and entitlements phased out, and massive public school spending supplanted by school choice.

(See )