This is only the first full week of the 2006 General Assembly ----- Are you kidding me?

 

DATE:           Friday, January 23, 2006

 

WITHIN THE LAST WEEK

 

SOME BRIEF COMMENTS ABOUT THE INAUGURATION...

Since last we wrote, Governor-elect Tim Kaine, Lt. Governor-elect Bill Bolling, and Attorney General-elect Bob McDonnell have become officially the three top elected officers in Virginia.  There may be some objections to this statement since both The Speaker of the House and the President pro tem of the Senate consider themselves to be top elected officers of the Commonwealth.  It is clear in the Constitution of Virginia, however, in Article V, Section 16 Succession to the Office of Governor, the Lt. Governor and then the Attorney General shall succeed the Governor incase of his (or her) removal.  The Speaker of the House is fourth in line then the “House of Delegates shall convene and fill the vacancy.” 

It is only in the event of an emergency resulting in the inability of the House to convene to fill the vacancy that the President pro tem of the Senate shall serve as the Acting Governor and then only if the “person designated to act in the stead of the Speaker of the House of Delegates as prescribed by the rules of the House of Delegates” is unable to serve as the Acting Governor.  Those drafting the Constitution of Virginia just didn’t trust the “upper house” to provide the Acting Governor except under extreme circumstances.  (Actually, these last considerations weren’t added to the constitution until after they were approved by the people in a referendum held on November 2, 2004.  The Senators probably allowed the resolution setting up the referendum to pass with that language because they couldn’t imagine any such extreme emergency happening in Virginia.  Now remember, this was after 9-11!)

Despite the rain (the 4500 clear ponchos were obviously a good investment since they kept all of the rented “monkey suits”—or are they still called mourning suits—and recently purchased dresses somewhat dry) and breezy weather, these historical inauguration ceremonies proceeded on schedule and, according to those who attended, were impressive.  After all, as the TV commentators made certain the watching audience understood, this was only the third governor who took the oath of office in Williamsburg. 

Those who stayed and watched the whole parade were treated to a very entertaining event.  For one of us in higher education, the comment of one high ranking legislator was most encouraging, “Without question the most outstanding band, in fact the most outstanding unit, was the Marching Royal Dukes of James Madison University!”

 

...AND THE GENERAL ASSEMBLY

 

The fast start of the General Assembly has most people who are trying to follow the action gasping for breath.  One long time lobbyist commented on Friday, Well, it certainly is nice to get the first month of the session behind us!”

It seems like committees are meeting constantly. As an example, today (Friday, January 20) one subcommittee started at 7:00 am, three at 7:30 am, another at 8:00am.  One full committee started at 7:30 am, two more at 8:30 am and another at 9:00 am. Normally those who are covering a number of committees for various clients or advocacy groups get a little time to have their second cup of coffee, but not on this “short legislative day.”  The Senate leadership held a press conference at 9:30 am to announce its transportation program, titled “Driving Virginia’s Future.”

The Senate convened at 10 am and the House at 11 am.  Vince Callahan, Chairman of the House Appropriations Committee cancelled the scheduled meeting of that committee, but the House Courts of Justice Committee still met Friday afternoon.  Most of the legislators left the capital area as quickly as they could after the sessions.  It’s been two weeks since they have “been home.”  This weekend they will try to tend to their businesses, see their families, meet with some constituents, and maybe even get to attend church.  Will they get to relax any?  It is very doubtful.

 

...AND THE MONEY COMMITTEE STAFFS HAVE A BUSY WEEKEND

 

The deadline for the introduction of amendments to the appropriation bills (HB/SB 29–amending the current budget, often called the “caboose” bill; and HB/SB 30 the 2006-2008 Biennial Budget) was Thursday at 5pm.  This year the committee chairmen had instructed their staffs to be much more diligent about who delivered amendments.  They wanted to be certain that either the legislator him or her self or their chief aide placed the amendments into the hands of the staff person responsible for logging in the amendments.  In the past, there have been several occasions when amendments were mishandled and were never adequately discussed by the proper subcommittee.  The chairs have explained this is for the protection of everyone’s “budget request.”

Inquiries this afternoon on the number of amendments met with glassy eyed stares by the weary staff people trying to sort through the major piles of paper.  For the House Appropriations Committee, estimates of the volume were made in how deep the piles of paper were.  For instance, the pile sent to the Health and Human Resources Budget Analyst was four inches deep, the pile to the Capital Outlay Analyst was five and a half inches deep (that may have included Higher Ed as well since the same person handles both), and then the non-state agencies stack was only about seven and a half inches in depth.  (Remember, a ream of paper is about two inches thick and contains 500 sheets of paper.  While loose paper will make more of a stack than a tightly bound ream, it still is a measure of comparison and gives you an idea of the work load the money committee staff people face this weekend and early next week.  The amendments are supposed to be ready for review by Wednesday evening.

On the Senate side, the staff of the Senate Finance Committee may have a slightly easier job, but not by much.  Even though there are only 40 Senators, practically every advocacy group wants their amendments introduced in both houses.  So the closest estimate for the senate is there are over 1000 amendments without considering the “non-state agencies.”  Ask any member of the committee and you find that practically every one of them has been requested to carry 40 to 60 amendments.  The philosophy of most members is, “we are responsible to the people and every citizen should have the opportunity to be heard on the issues of interest to them including the request for money for their particular cause.”

One committee member did comment on the volume of amendments, “There’s just too much publicity about the ‘surplus’ this year.  It’s a whole lot easier on us when the revenues are tight and everyone knows that’s the situation.  We’re getting a lot more requests this year than we did in 2004.”

 

THE BIG ISSUE–TRANSPORTATION–COMES TO THE FRONT

 

Today became the day!  The Governor and the Senate announced their programs to address “the Commonwealth’s transportation crisis,” and now the cards are on the table. 

The Senate’s plan with all of the legislation filed to round out their 21^st century initiative–“Driving Virginia’s Future”–is designed, according to the Senate Finance Committee Chairman, Senator John Chichester, to improve accountability and stewardship over the current system so assets will last longer, to connect the dots between local land use and transportation planning, and to make transportation as high a priority in this Commonwealth as education, health care, and public safety without competing with these core services for funding. The Senators, in their press conference, continually stressed that their plan provided a dedicated and sustainable revenue source for transportation.  “We cannot ‘cure’ transportation by draining the lifeblood from public and higher education, health care and public safety.”  So stated John and the other senators, Republicans and Democrats.

The Governor in announcing his plan stressed several of the same factors.  He noted his plan addresses the transportation challenges in “creative ways.”  He notes the necessity of insisting on accountability and providing local officials with the tools they deserve to better link transportation and land use planning.  As promised in his campaign, he will work to ensure the money intended for the transportation trust fund cannot be siphoned away for non-transportation projects. His plans also call for the creation of a Commission on Transportation Accountability which will, if adopted, include General Assembly representation.  It will set goals by which the state can measure the effectiveness of projects and, “get the best value for our transportation dollars.”

Both plans depend on increases in taxes and fees.  Both shoot for the $1billion per year which most “experts” have stated is the minimum needed to start addressing the state’s transportation needs.  Both increase the present 3% titling tax up to 5%.  The Senate’s proposals would “remove the 2% discount on auto sales” over a four year period deducting ½ % per year.  The Governor’s recommendation is to “equalize the motor vehicle sales and use tax (the titling tax as we called it when the sales tax was first instituted in 1968) with the retail and use tax.”

The auto insurance premium tax (estimated to be 1/3rd of the insurance premium taxes now collected) will be dedicated to transportation.  This has been done within the Appropriation Act for the last fiscal year.  It will become permanently dedicated to transportation under both of these plans.  The House originally shifted these funds (previously all of the insurance premium tax went to the General Fund) so this is a change that will in all likelihood pass the full assembly.

Other revenue proposals in the Senate plan are “remove the sales tax exemption on gas at the wholesale level–2% in FY 07 and 1% per year for 3 years (FY08, 09 and 10);” remove the sales tax exemption on auto repairs in FY 09; apply the same tax rate for diesel fuel as on gasoline; and increase vehicle registration $10, plus an additional $10 for SUVs. 

In the Governor’s plan motor vehicle registration and titling fees would be increased based on the weight of the vehicles.  His plan also adopted a proposal put forth by the House last year to increase fines (substantially) on abusive drivers.  The rational for this is that 1/3rd of the congestions in NOVA and other metro areas are caused by accidents “frequently caused by abusive drivers.”  These increased fines would be dedicated to the transportation funds. 

Both proposals incorporate the $339,000,000 in general funds for transportation recommended by outgoing Governor Warner for “targeted one-time expenditures.”

The total increases in funds going into transportation in these plans match up like this: FY 07-Senate, $674.7, Gov. $1,109.5; FY 08-Senate, $887.0, Gov. $849.7; FY 09-Senate $995.0, Gov. $870.83; FY 10-Senate, $1,220.0, Gov. $906.52. 

The Governor made it very clear he is anxious to get started with a solution.  He left the door open for a special session, but barely.  It would take a major impasse, in my opinion, for him to resort to this approach which as some of you may remember Governor Jerry Baliles used successfully in 1986.  The interesting part is the positions outlined by the Senate Bipartisan Leadership and the Governor do kind of differ from the House Republican Leadership’s anti-tax stand.  Perhaps Speaker William Howell stated this position best when he said, “...higher taxes are indefensible given the booming economy that has generated a surplus that exceeds $1 billion.”

It is very conceivable that these differences could create an impasse which would lead all the parties involved to conclude a “cooling off” period might be needed.  Then a special session in the late summer or early fall could be come a reality.

 

THE REVENUE PICTURE STILL STRONG

 

Secretary John Bennett’s final Revenue Data Letter to the Governor and through his office to the General Assembly was dated January 12 and incorporated the “revised general fund revenue forecast on which the introduced budget is based.”  It is very interesting that the November forecasts used in the introduced budget, after two months, seem more than just conservative, but rather ultra-conservative.  The total expected general fund revenue (before consideration of the Lottery Revenues) for FY 06 was raised from $13,313,500,000 to $14,527,800,000.  If these forecasts were reasonably accurate then the “ % annual growth required by the Estimates” from FY 05 to FY 06 ought to be on target.  In the Secretary’s report the Year-to-Date growth for the first six months of this FY has been 11.3% while the growth needed to meet the estimates used in the budget is only 6.1%. 

Will this growth rate in revenue continue?  The February report giving us January revenue receipts will help answer that question.  But from what I hear the daily revenue receipts have been very good.  Do remember, for each 1% increase in growth above the forecast there will be $145 million in the state’s coffers!

 

ELECTION ON THIS TUESDAY

 

The next special election, to fill the seat vacated by Delegate Ryan McDougal’s election to the State Senate, takes place this Tuesday, January 24^th.  The Democrats are hoping for an upset, the Republicans are confident their candidate Chris Peace will prevail.  As noted last week, special elections are hard to predict.  The turn out will be crucial.  This Hanover area district is in the Richmond media market and let me tell you both parties are pouring the money into the race.  It will be interesting to see if the Democrats can continue their recent string of election victories in House special races.