Giesen Perspective

The Giesen Perspective

The Governor’s Budget Kickoff & the “Short Session”

DATE: Monday, December 18, 2006

The Governor Addresses the Money Committees

As is normal, the Governor put the major bill of the 2007 Session of the General Assembly in play on Friday when he delivered his “money address” to the three money committees of the Assembly. You remember those, the Appropriations and Finance Committees of the House and the Senate Finance Committee. When Governors’ speak about the finances of the Commonwealth, they often lapse into an “accountant mode” of delivering their speech. Governor Kaine was no exception on this occasion.

One can start with the understanding that this particular Governor comes from a trial lawyers’ background, and is therefore much more adapt at delivering “emotional, inspirational” addresses extemporaneously than reading them from a prepared script. Secondly, for the past several weeks the Governor has been out and about in the state talking to various groups — educators, business people, the Commonwealth Transportation Board, environmentalist, local government officials, and others — giving them insight about what would be in his budget amendment recommendations. So there were very few surprises in what the Governor had to say on Friday. In fact, you could say, for those that have been reading the newspapers and listening to the electronic media, there were absolutely NO major surprises.

One of the Governor’s staff members, a rather senior capitol operative, stated it most succinctly when the question was asked just before the Governor walked into the packed committee room, “Will there be any surprises in the Governor’s address?” “Heavens no! We have a press office that doesn’t believe in leaving any surprises on the table for the legislature!”

Of course, the “press office” takes its direction from the guy in charge. His Excellency understands how the media works. Thus, six or seven different stories over a two week period gets the Governor’s name in headlines a whole lot more often than a single story on the day of the “formal address!”

The legislators and the audience sat silently through the majority of the speech. The only interruption came late when Governor Kaine reiterated a position he had announced earlier in the week. He stated, “I propose that we provide meaningful tax relief for thousands of Virginia households by increasing the filing threshold on the state income tax from $7,000 to $12,000 for an individual and from $14,000 to $24,000 for a married couple.” Applause came from all sectors, including the very conservative Delegates.

Interestingly, this “applause getting proposal” will impact a remarkable number of Virginians. 176,000 people will no longer have to file the paperwork to prove they owe no Virginia state income taxes and another 147,000 citizens will no longer have to pay any state income tax. These figures are from the tax data year 2004, according to the Governor’s statement.

CONTRAST IN STYLE FOR THE GOVERNOR

In contrast to the Friday reception received by the Governor, on Monday, December 4, when the Governor gave “remarks” at a reception at the Jefferson Hotel, he had a rather extraordinary response. He was talking to an assembled group of Virginia business leaders under the sponsorship of the “Virginia Foundation for Research & Economic Education, Inc.” (commonly referred to as VirginiaFREE). In an extemporaneous talk one-third the length of his address to the money committees he was interrupted with major applause six times. He seemed much more animated, expressive and impassioned about his subject. He evoked an active response from his audience. His subject, what he intended to emphasize to the 2007 General Assembly — much like what he said to the Legislators, but with so much more enthusiasm and so much better response.

Another example of how this Governor is more effective in his speaking style when he is in a less scripted situation. On Tuesday, December the 12^th, the Governor presided over an announcement of a $12,000,000 appropriation which he was including in his budget amendments for an economic development project in the Shenandoah Valley. This was another item which he reiterated in his Friday address to the money committees and should have elicited some good applause led by the Valley delegation. None was forthcoming. Obviously, those directly involved had not been forewarned that this “targeted economic development opportunity” to bring the independent, non-profit SRI (Stanford Research Institute) International to Harrisonburg, was going to be part of this speech.

There was certainly long and loud applause when the Governor gave this fact to the assembled group during his Press Announcement on Tuesday. Again the strong emphasis and passionate delivery was not present on Friday as it was on Tuesday, and maybe those who should have, and probably would have, led the applause were caught off guard and unaware. It is my understanding written copies of the Governor’s speech had not been pre-distributed to the Delegates and Senators. Maybe the senior members of the Governor’s staff need to brief the junior communication people how these things should be orchestrated.

TRANSPORTATION STILL THE ISSUE IN THE EYES OF THE GOVERNOR

While most Capitol watchers have and continue to speculate that nothing will happen in this “election year” session of the Assembly, the Governor has taken a strategy of “keeping the pressure on!” His speech before the VirginiaFREE was definitely designed to keep the business community pumped up to push for “sustainable long term financing for the transportation needs of the Commonwealth.”

In his address Friday he gave a definitive statement, “Transportation remains the most urgent problem facing Virginia today.” In his next sentence he challenged the Assembly (and in the minds of some of the Delegates, took a shot at the House Republican Caucus) by stressing, “Across the state, Virginians are frustrated with the failure to reach a comprehensive solution in 2006. That failure had a price: escalating project costs, growing areas of congestion; and delay in providing emergency evacuation routes.”

The Governor then spent 1/6^th of his speech talking about the transportation problems and his amendments to address “one time expenditures” with General Fund (GF) revenues above the forecasted amounts. These funds are forecasted to reach $690,000,000, up from the $600,000,000 which the money committee staffs were forecasting in November. The Governor added the $339,000,000 in GFs appropriated for transportation but not designated for specific projects in the budget passed last June. So he noted he was introducing amendments for the remainder of the biennium amounting to slightly over $1 billion. Of course, he had made this statement to the Commonwealth Transportation Board on Thursday, so the General Assembly members had 24 hours to think about it and craft their response to his “initiatives.”

With this approach, the Governor claimed he was allocating half of the extra GF dollars for transportation. The interesting part of his approach is the House Republican Leadership has been calling for “100% of the GF surplus to go for transportation” and the large majority of the Senators have been holding out for “a long-term, sustainable source of funding for the transportation problem.”

Now the House members are claiming the Governor is beginning to see the wisdom of their approach but they are still upset because they want more (like the whole pie). The Senators, meanwhile, are upset because they feel the Governor has compromised his solid position calling, as have the Senators, for long-term, sustainable transportation revenue sources. He did conclude his comments on transportation by saying, “The truth is, one-time surplus monies are insufficient to meet these needs. These and many other necessary projects (he had listed a number of investments needed now in Virginia for transportation)across the state need long-term, sustainable transportation revenue.” But the Senators are afraid he has started down the road of compromising his (and their) resolve to generate new funding to help solve the transportation issue.

Sometimes it can get uncomfortable being in a leadership role. But then as Harry Truman allegedly said, “If you can’t stand the heat get out of the kitchen.” Just how hot this kitchen may get before the end of the session remains to be seen.

THE “SHORT” SESSION.

The Joint Rules Committee met and considered the Joint Resolution to establish the timing for the 2007 General Assembly Session. With very little debate, the committee reported a calendar for a 46 day session (Wed., Jan. 10 thru Sat., Feb. 24). Being an election year there will be plenty of pressure on everyone to conclude this session on time. However, with the transportation issue being brought to the front burner and plenty of heat being generated on the Republican House members from Northern Virginia and Tidewater to “take action,” it may be difficult for the members to accomplish this goal.

Speaking of the heat being generated on some of the Republican House members, there is another “rumor” in the capitol halls that there may be unrest within the House Republican Caucus. There are a number of members who have seen the recent voting results and heard the complaints from their constituents and are very uncomfortable with the “no tax increase” stance of the caucus. This is particularly true when it comes to the transportation issue. So within the “executive sessions” of the caucus, there may be some really heated debates!

Will these debates lead to a change in the position of the caucus? Looking at the numbers it is doubtful. But stranger things have happened. After all, politics makes strange bed fellows. Well, sometimes it does!

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Arthur R. Giesen, Jr., fondly known as Pete, served in the Virginia House of Delegates for over 30 years. He represented the citizens of the Central Shenandoah Valley surviving four different district realignments. During his career he represented Augusta, Bath, Highland and part of Rockingham County and the Cities of Staunton and Waynesboro.

Following his career as an elected official, Pete assisted Lt. Governor John H. Hager as his Chief of Staff.

Pete now keeps an eye on Virginia government and assists many clients with his unique perspective on the workings of the Virginia General Assembly and its relationship with the other branches of state government.