3/5/2010 General Assembly Round-Up

March 5^th, 2010

General Assembly Round-Up 

The Budget

Last week on the voting block was the House version of the State Budget, which the Republican majority (actually I understand it was very few Republicans) wrote for the first time in many years with absolutely no input from Democratic legislators. The fact that they shut out of the process the Democratic side of the House, even those Democrats who sit on the budget-writing Appropriations Committee, is not in itself the reason I opposed the budget.   But a budget that incorporated ideas and input from both sides of the aisle might have avoided some of the fatal flaws in the two-year, $75 billion spending plan that every House Republican voted for and every House Democrat voted against on Feb. 25.

In the face of the worst revenue crisis since the Great Depression, cuts in state money to education are inevitable, especially considering how successfully we have protected public education while we cut $7 billion over the past four years.  However, rather than making temporary cuts that can be restored when the economy improves, House Republicans seized the opportunity to institute long-term policy changes that will undermine public schools for years to come.  For example, in the guise of “flexibility” for school districts, they are lowering quality by allowing larger class sizes — even though we know that small classes produce better outcomes.  Rather than merely reduce funds for preschool, early reading intervention, and services for at-risk children, they have lumped these services into a lottery-funded block grant and then changed the distribution formula to literally take money away from poor students and give it to students who aren’t poor.  (Our community, which has a high proportion of low-income students, loses millions of dollars under this scheme.)  Rather than build the education budget on solid accounting, they built the education budget on a foundation of sand, giving local governments the authority to increase what teachers pay toward their retirement benefits, assuming every local government will extract the maximum amount possible from those teachers, and then folding that fantasy figure into the state budget calculus.  Any education cuts should be temporary, they should not compromise quality in the classroom (and certainly not permanently), they should not be on the backs of poor and at-risk students, and they should be based on real numbers.

House Republicans have railed against the federal government all session, passing bills to assert “states’ rights” over everything from health care to commerce to the manufacture of firearms.  Imagine our surprise when they included in the House budget language to spend Medicaid funds that Congress has not yet even approved.  However, in another fiscally obtuse move that might have been prevented with Democratic input, they specifically redirect any new federal Medicaid enhancement money (which they hope and assume Congress will pass) from health care for the neediest Virginians to non-health care programs, foregoing the corresponding federal matching funds. Therefore, rather than cutting just $370 million from Medicaid, they are choosing to leave on the table $730 million of federal matching funds, producing an overall cut of $1.1 billion. To their credit, House Republicans did include 178 MR Waiver slots in its budget, an item that is missing in the Senate Budget.

Another area of deep concern is the high-risk plan to postpone state contributions to the Virginia Retirement System.  The Pew Center on the States recently released a comprehensive report on state pension liabilities, and it noted that Virginia is already paying slightly less into our pension trust fund than is actuarially prudent to ensure we can meet all of our future obligations.  According to the director of the Virginia Retirement System, if all goes well and the economy improves — and if we don’t make a habit of skipping these payments — Virginia’s pension trust fund should eventually grow enough so we can still meet our future obligations.  But what if the economy slips again or if growth does not meet expectations?   Failing to fully fund our pension trust fund could find us shortchanging teachers, fire fighters, law enforcement officers, and state and local employees of the benefits they have earned.  While temporarily postponing state contributions to the Virginia Retirement System may be a fast and easy (and, I fear, addictive) way to come up with $800 million to help balance the budget, it is too great a risk to our future financial stability.

Massive cuts to public education and health care and raiding the state pension trust fund will result in tens of thousands of lost jobs (approximately thirty-thousand to be exact, based on reports from the VEA), hinder our economic recovery, threaten our triple-A bond rating, and diminish our coveted rankings by independent groups as the best state for business, best state to raise a child, and best managed state. 

The Senate Budget also came up for review this week and the Senate has proposed a balanced budget which it contends does not contain a general tax increase. While the Senate budget was not as hard on education as was the House budget, it too has significant flaws. The Senate Budget is riddled with fees (i.e. taxes), in particular extraordinary and unconscionable court filing fees that would virtually close the doors of the court house to the poor and the middle class. It would also have a far more serious impact on Medicaid to the point where our local community service boards could possibly fold and put our most vulnerable citizens in perilous jeopardy. These are a mere taste of the reasons I voted against the House and Senate Budgets last week, but I remain hopeful that House and Senate negotiators will eventually produce a budget we can all support. 

Consumer Issues

The citizens of the Commonwealth can rest assured that Virginia will not become the dumping grounds for water damaged vehicles for one more year thanks to the Senators sitting on the Senate Transportation Committee who decided to carry the bill over to the 2011 Session, to get all the stakeholders together and hopefully reach a resolution to this issue. I will be taking an active role in this process over the next several months.

Regretfully, I was unable to stop the automobile dealers from being able to drive a vehicle for 7500 miles and still sell it as a “new vehicle” (the current law allowed for 750 miles before a car needed to be declared “used”). The Virginia Automobile Dealers Association contends that this legislation will allow them to get better financing for their customers. My concerns are that the dealers will charge unusually high amounts for these vehicles and that it creates and unlevel playing field between the dealer and consumer. This bill does call for full disclosure to the consumer that the vehicle has been driven for 7500 miles.

Senate Bill 606 which pertains to car title loans has successfully passed the Senate and will be decided by the House next week. While the interest rate on these particular consumer transactions is ridiculous for a secured loan, the bill is a huge improvement over the current state of the law. I intend to support the bill.

Charter Schools

Public charter school legislation came up in the House again this week. I am generally not in favor of charter schools because of my concern that they will undermine the vitality and viability of our public school system and will be very harmful to at risk students. Despite these views, public charter school legislation passed the House with relative ease. 

Ethics Reform

Ethics reform remains alive, at least for the moment, after a divided Virginia Senate panel passed a bill Friday to overhaul legislative ethics rules, a day after a House committee killed a similar measure. House Minority Leader Ward Armstrong's HB 655, which I am a Chief Co-Patron on, would make public the hearings of any formal ethics inquiry into the conduct of lawmakers. Under current law, those proceedings are confidential. The bill also would allow active ethics investigations to proceed even if the legislator who is the subject of a probe leaves office. I remain cautiously optimistic that this bill will make its way to the Governor’s desk.

Transportation Plan

Regrettably, I am saddened to report to you that transportation planning has not been a high-priority issue in the General Assembly once again this Session. While I realize we face a transportation crisis and we must act now, I am hopeful that the Governor will call a Special Session to address this issue once the General Session has adjourned.

Please feel free to contact me if you have any questions or concerns: delrabbott@virginia.house.gov or at (804) 698-1193.