Delegate Jim Scott's Richmond Report

Precedents shattered

As we near the end of an unprecedented third month in session, the General Assembly seems a little closer to completing the state’s budget. Although technically in a special session, the House and the Senate have met continuously since January 14. Each House sent its version of the biennial budget to the other body in mid-February.

Usually late in the regular session, several members (4 from the Senate and 5 from the House) of each body are named to a committee of conference to develop a compromise to be approved by both Houses and sent to the Governor who may veto any item. Each conference committee is led by the chairs of the appropriating committee in each body. The House chair is Del. Vince Callahan of McLean.

This year, after 30 extra days, the House and Senate, both with large Republican majorities, are still far from agreement.

Let’s review the bidding.

The Governor proposed a two-year package that included tax reform. The House proposed a minimal budget with no taxes increases that failed to correct the structural imbalances which caused Moody’s Investor Services to suggest it might downgrade the Commonwealth’s bond rating. Such a rating change would cost the state and its localities $$ millions.

The Senate proposed a budget that eliminated the estate tax and the “car tax” while increasing sales, gas and income taxes. It also attempted to make the state’s finances more fair and corrected previous inflated revenue assumptions. In addition, the Senate budget fully funded the Commonwealth’s obligations to its localities in public education and public safety.

For the second time in three years, the House and Senate have not been able to agree on a budget. Such a stalemate had never happened in the memory of any long-time observer with whom I have spoken.

Since the initial exchange of budgets, very little has gone according to tradition. The Republican majorities in both Houses refused to compromise and said the other body must do so until several days ago. The Senate reduced its budget by more than $1.2 billion by cutting transportation increases, but until Wednesday, April 7, the House had adamantly refused to compromise. The House remains in the firm grip of younger right-wing members, who have taken pledges to never raise taxes, even taxes on tobacco.

Small movement in the House

On Monday, the Speaker of the House announced that he would allow a committee vote on the compromise revenue bill. Before the committee could vote, however, he had apparently changed his mind. The Committee tabled the bill. The House Republican moderates thought they had an agreement to bring the bill from the committee using a never-used motion to discharge the committee and send the compromise to the floor of the House.

On Wednesday, the signals changed again, and House Finance reported the compromise bill by one vote, with a number of Republicans being absent. We understood that bill would be voted on immediately. If all Democrats voted for the bill, as the Governor requested, it would be sent to the Senate—if the 17-19 Republican moderates who indicated support for the bill voted in favor of it.

At the last minute, the House leadership changed its mind again: the House would recess until the Monday after Easter. At that time, the new bill would be debated and voted on. If approved, it would be the basis of a true compromise.

The Governor’s Leadership is critical

In order to reach this point of possible compromise and resolution, the leadership of Gov. Warner has been crucial. Without his energetic and strong involvement, a solution to the budget crisis that has brought Virginia to the brink of budget chaos and bond rating downgrading would not be in sight. Certainly neither of his two immediate predecessors exhibited any inclination to take such courageous steps to protect Virginia’s financial stability.