The Northern Virginia Daily's Political Depot

A service for our readers outside the Northern Shenandoah Valley... a sampling of The Daily's political coverage, plus unofficial, 'reporter's notebook' stuff. And occasional dry humor...

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Location: Strasburg, Virginia

Thursday, December 29, 2005

Out with a Bang; A1

Louderback says goodbye to the life of a delegate

By Garren Shipley
(Daily Staff Writer)

LURAY — When the General Assembly is gaveled to order on Jan. 11, Allen Louderback won’t be there.

The Page County Republican is hanging up his political career, after opting not to seek re-election as 15th District delegate in November. Todd Gilbert, a Republican and former Shenandoah County Commonwealth’s Attorney from Woodstock, will take over in January.

But his impending retirement didn’t stop Louderback from speaking his mind this week during an interview with the Daily at his home in Luray.

Legislators need to remember who’s paying the bills and do a much better job of watching the bottom line, he said in no uncertain terms.

“I think the biggest problem we have, when there’s extra money, we don’t have the political courage to cut back and in cases reduce percentages of taxes raised,” Louderback said, sitting in his district office in a front room of his home.

This year’s budget proposed by Democratic Gov. Mark R. Warner is a prime example of what’s wrong with Richmond these days, the three-term delegate said.

“How fast is inflation and population grown in the same period?” Louderback said. “It’s not grown 13 percent,” the amount of growth in Warner’s budget.

“We should be tying our budgets to that figure. Not ironclad, but at least as a guideline,” he said, leaning forward in his chair.

“If we’re going above that figure, then we ought to be rebating some of that money and causing our agencies to be tighter in their efforts.”

Making sure tax dollars don’t get wasted has been the hallmark of Louderback’s six years in the legislature.

The founder of the bipartisan Cost Cutting Caucus said the state’s agencies have forgotten what taxes are all about.

“I think they just see it as money created out of the blue, therefore it has no meaning to them,” he said. “I hate to say that, but it’s true.”

His fight to get rid of “VDOT Orange” is a prime example. Louderback pushed for years to force the Virginia Department of Transportation to buy equipment in colors produced by manufacturers off the shelf, rather than painting it orange.

But some at the agency and others in government fought back, saying the specialty paint color was a safety issue. Now, with white trucks and stock color chain saws, the state is saving $200,000 per year.

“There was no incentive to work harder to save money” anywhere in state government, he said. “They got paid the same no matter what.”

It’s something the state’s Republican party should keep in mind as it goes into the 2006 session, Louderback said. In recent years, the GOP has been rolling over when things get hot when it comes to using taxpayer funds wisely.

“We have a responsibility to the taxpayers first,” he said. Legislators must do a better job of riding herd on the legion of state agencies that spend tax dollars.

“I still don’t see that. We have agencies that need to be worked on to do a better job,” he said.

State spending has gone up some $20 billion while he’s been in office.

“To me, that says there’s some real weakness in how we’re handling the money that the taxpayers are giving to us,” he said. “There are things that we’re getting into that we shouldn’t be.”

Take, for example, the state’s Alcoholic Beverage Control stores. That’s one bit of unfinished business the delegate is passionate about.

Louderback carried bills for years that would have “franchised” the stores into private hands, letting the private sector reap profits from sales while the state nets the taxes and franchise fees, all the while keeping a tight rein on regulations.

“If their figures are correct as to what these stores are bringing in” the franchise sales could be worth $600 million, he said.

At a time when school systems are clamoring for more funds and the state needs billions for transportation, “$600 million, even a one-time shot, is a pretty good infusion of funds that’s just laying there,” Louderback said.

With all that still needs to be done in Richmond, one might think the last thing Louderback would be doing this year is packing it in. But he’s hanging up his political career for one basic reason — time. He said he’s tired, and wants to start paying attention to his businesses again.

“Money isn’t everything, but you’ve got to eat and take care of your family,” he said.

The 15th House of Delegates district is huge, and a long way from Richmond.

Whoever holds the seat represents residents of Strasburg, Orkney Springs, Flint Hill in Rappahannock County and all points in between. Getting around to see the constituents — added to day trips back and forth to Richmond — is tough to do.

Still, it was worse before the last round of redistricting took parts of Frederick and Warren counties out of his bailiwick, Louderback said.

“[The district is] not quite as huge as it was when I first got it,” he said. Just meeting constituents was tough back then.

“You’d go to some of the functions, especially in Frederick, and there’d be about 100 people there,” Louderback said, “and you’d be lucky if eight of them were from your area.”

The General Assembly convenes on Jan. 11.


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Update? What's that?

Sorry for the delay in political posting. The entire political staff over here was briefly overtaken by events beyond our control, and for a time we were trapped in the lower realms of dial-up again. But, barring an extended New Year's break, we're back.

So buy a newspaper already.


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Friday, December 23, 2005

Study finds government spending rises by average of 7 percent a year; A1

By Garren Shipley
Daily Staff Writer

Government spending in Virginia over the last decade has gone in one direction — up — regardless of which party has held the governor’s office.

That’s one of the findings in a new study released this month by the General Assembly’s Joint Legislative Audit and Review Commission.

Commission staffers found that state spending has increased an average of 7 percent each year between fiscal 1996 and fiscal 2005, no matter who was in charge of state government.

“There are several ways of explaining state budget trends,” the report’s authors write.

“National factors such as inflation must be considered in understanding long-term growth. Economic and population growth also has important impacts on state revenue and spending,” they wrote.

Programs like Medicaid, which are federally mandated, have grown rapidly without legislative intervention.

Big changes in the budget also came about from campaign promises turned policy — Gov. Jim Gilmore’s car tax relief — and changes approved by voters, such as the creation of the constitutional “Rainy Day” fund, both of which have eaten substantial chunks of revenue since their inception.

So where else did legislators spend another $13 billion? Not as many places as some might think.

Some 91 percent of the entire increase was spent on 20 of the more than 140 government agencies operated by the commonwealth. At the top of the heap is the Department of Education, which saw its budget grow by more than $2.4 billion.

The Department of Medical Assistance Services, which is responsible for Virginia’s Medicaid program, grew by almost the same amount.

Next in line is the Virginia Department of Transportation, which saw its budget increase by $1.3 billion over the last decade.

Those three agencies alone make up almost half of the entire budget expansion over the last decade, according to the report.

When taken by program, education again leads the pack, with an additional $4.1 billion, or 31 percent of the total $13 billion growth, being spent each year for all levels of Virginia education in fiscal 2005 than in fiscal 1996.

Individual and family services — programs like Medicaid and welfare — grew by $3.8 billion, or 30 percent of the entire budget expansion.

General government, which includes reimbursements to localities from car tax relief and debt service on public bonds, grew by $1.9 billion.

That category took up 15 percent of the overall spending growth.


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Bloggers dig into Warner’s final budget; A1

By Garren Shipley
Daily Staff Writer

They had plenty to say about the election.

Now they’ve got even more to say about governance, starting with Gov. Mark R. Warner’s final budget.

Announced last week, the Democrat’s fiscal swan song has been met with a muted reaction in official Richmond. But Virginia’s political bloggers are tearing into the raw data and more often than not, they don’t like what they see.

The roughly $70 billion, two-year budget increases spending over the last biennium, but doesn’t include any new changes to the state’s taxes — no hikes or cuts.

Bloggers, a term for the keepers of Web logs, rose to some prominence during the gubernatorial campaign. More than a dozen sites now follow Virginia politics closely, with a mix of commentary, gossip and news.

Both the Republican and Democratic campaigns fed information to the sites during the race for the governor’s mansion. The campaign of Democratic Gov.-elect Tim Kaine went so far as to hold a conference call with bloggers.

Now that the campaign is over, some of the self-described pamphleteers are taking a hard look at the Warner administration’s final budget.

Jim Bacon, head pundit at Bacon’s Rebellion, an online magazine that focuses on government and public policy issues, said there’s one overriding bad number to the proposed budget — 13.7 percent.

“That’s how much state spending will grow under Gov. Mark R. Warner’s proposed … budget over the current budget,” he said. “Even with inflation warming up, that’s a rapid expansion.”

But that’s just a little over par for the course, according to a new study by the Joint Legislative Audit and Review Commission, a quasi-investigative arm of the General Assembly.

Over the last 10 years, spending has increased an average of 7 percent per year, even during the downturn of 2001 and 2002.

Between fiscal 1996 and fiscal 2005, Virginia’s budget has gone from $16 billion to $29 billion, an increase of more than 80 percent, or 45 percent adjusted for inflation, according to the commission.

Even so, it’s not all bad, according to Bacon.

The fact that Warner didn’t introduce new recurring spending initiatives and has forecast a conservative rate of growth for state income over the biennium is good news, as is the fact that the budget has now been published in a much more user-friendly format that makes year-to-year changes easier to follow.

It’s better to spend revenues on things like research and development at state universities than create new programs, he said.

Across the aisle at “Raising Kaine,” blogger Lowell Feld gave the budget high marks for its $200 million-plus to improve the state’s water quality. Warner announced the new money for waste water treatment plant upgrades ahead of the budget roll out.

“Among other things, I’m thrilled about the Chesapeake Bay and also the language making it illegal for the Commonwealth to discriminate on the basis of sexual orientation,” Feld said.

But Norman Leahy, keeper of the “One Man’s Trash” blog and former executive director of U.S. Term Limits, said the budget is just more fodder for those calling for a Colorado-style “Taxpayer Bill of Rights.”

Such laws generally cap government spending and call for the refund of surpluses to taxpayers.

Virginia has posted surpluses every year since fiscal 2003. If current projections hold, the state will have banked more than $1.7 billion by the end of fiscal 2006 since the surpluses started.

“His budget makes a very strong case for a taxpayers’ bill of rights,” Leahy said. “And yet we’re told by some that the state hasn’t spent nearly enough on education, transportation, health care — you name it.”

Don’t look for a rebate check from Richmond anytime soon, though, he said.

“Since the political will does not exist in the General Assembly to curtail and control state spending, let alone rebate excess revenues … to taxpayers, the best we can hope for is a bit of trimming here and there,” he said. “But even that may be wishful thinking.

The legislature convenes Jan. 11.


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Monday, December 19, 2005

Warner presents final state budget; A1

Governor stresses fiscal prudence, urges assembly to spend carefully

By Garren Shipley
(Daily Staff Writer)

RICHMOND — Virginia is in good fiscal shape, but the General Assembly would do well not to count on good times forever.
That was one of the key points in the final budget presented to the General Assembly by Democratic Gov. Mark R. Warner on Friday.

In a speech to the legislature’s money committees, Warner said his new $68.8 billion budget for the 2006-08 biennium was one that took advantage of current good times but was still financially prudent.

The budget contains no tax hikes or cuts. It relies on revenue growth to fund new spending.

Warner hit on themes of fiscal pragmatism, something he’s done throughout his tenure, and said that 52 of 96 state agencies are smaller than they were before he took office.

But that’s not what matters, he added.

“At the end of the day, people don’t care if a good idea has a ‘D’ or an ‘R’ attached to it,” he said. “And they care less than most people think about whether government is big or small. What they want is smart and efficient government.”

Holding the line on spending should be the order of the day, with the exception of some one-time expenditures like $200 million for sewage treatment plants along the Shenandoah, Potomac and James rivers, and some $150 million to match earmarks in this year’s federal transportation bill.

That bill will bring more drainage improvements to U.S. 11 in Maurertown. Warner’s budget also includes funding for the new armory in Winchester and expansion of the Northwest Regional Jail.

Warner appears to be making room for the new administration, said Del. Joe May, R-Leesburg, one of the few legislators from the area affected by Thursday’s ice storm to make it to Richmond on Friday morning.

“What was presented was what I would refer to as a plain vanilla set of budget amendments with no huge surprises in it,” he said.

That’s an “indication that the balance of the budget-making process will be done by the Senate and by the House,” he said. “I don’t think the governor made any attempt to have any earth-shattering initiatives.”

“He’s going out on a very gracious note,” May said.

Warner said his emphasis is on keeping the books balanced.

“In this budget, we will not make spending or tax policy commitments whose cost will show up or escalate in the out years,” Warner said.

“We will not start major new programs,” he said. “And, we will not casually assume that Virginia’s revenues will continue to show extraordinary growth for the next 2 1/2 years.”

The commonwealth is expected to post an $860 million surplus by the end of fiscal 2006.

Instead, Warner’s final budget is based on declining growth, dropping to 5.1 percent by fiscal 2008.

Warner’s fiscal swan song doesn’t include any significant funding for one of his successor’s top priorities — pre-kindergarten education.

Gov.-elect Tim Kaine announced his desire during the campaign to start a universal pre-K education program for the state, but said costs for the program would be so large that they would have to be phased in over time.

Friday’s budget as proposed sets aside some $8.6 million over the next two years for a proposed Virginia Early Childhood Foundation, which would seek matching private dollars to improve “early childhood services.”

For his part, Kaine said he supports the spending plan.

“This budget wisely invests in our core priorities and adheres to the principles of accountability and fiscal responsibility,” he says in a statement issued while Warner was speaking.

“Governor Warner’s good stewardship of Virginia’s economy has served the state’s best interests. As Governor, I will continue the commitment to the sound fiscal practices that have earned us our good standing,” the statement says.

The General Assembly convenes on Jan. 11.


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Transportation panel has fourth meeting; A1

By Garren Shipley
Daily Staff Writer

RICHMOND — Virginia has serious transportation problems, but finding a politically feasible way to fix them — or even talk about fixing them — is more complicated than it looks.

Members of the Statewide Transportation Analysis and Recommendation Task Force met for the fourth time on Friday at Virginia Commonwealth University to try to hash out a final recommendation for legislators.

The panel, convened by Senate President Pro Tem John Chichester, R-Fredericksburg, sifted through more than $1.4 billion in possible new or increased taxes and policy reforms and spending priorities to guide staffers in drafting legislation for the upcoming session.

But the money discussion hit a major roadblock Friday when panel members confronted a fundamental political reality — what to do about the House of Delegates.

Virginia’s upper and lower houses are both led by Republicans, but the two part company on matters of taxes — most notably during the 2004 session.

Senators signed off on a $1.5 billion tax hike, but it took a mini-revolt by moderate Republicans in the House to get the measure through.

Raising $1 billion per year in new taxes may not provide enough money to pay for the state’s transportation needs, said Sen. Mary Margaret Whipple, D-Arlington.

But the House won’t have anything to do with a $3 billion tax hike, said Sen. Martin Williams, R-Newport News. Fuel tax increases, sales taxes on gasoline and regional sales levies won’t fly, he said.

The sales tax has generated concern from gas station operators in particular, said Ben Davenport, the chairman of the Virginia Chamber of Commerce, one of the non-elected members on the panel.

Profit margins on gasoline sit at about 12 cents per gallon, and adding a sales tax raises the total price. That makes it more expensive for operators to accept credit cards.

Credit card companies generally charge merchants a percentage of each purchase for providing their services.

“Everything on the table” had best include some political pragmatism, Williams said.

“We’d better think of something we can reasonably raise and get though the General Assembly,” he said.

It’s about needs, not about politics, said Sen. Edward Houck, D-Spotsylvania. The proposal should be a real plan to fix Virginia’s transportation problems.

“I can’t make my decisions based on what the House of Delegates” will go along with, he said.

If that’s how the committee will operate, “then we might as well pack up and go home.”

Committee Chairman Sen. Charles Hawkins, R-Chatham, called for unity from the outset.

“I want this to be citizen-driven,” he said. “This is our child. We ought to adopt it.”

The problem they’re trying to address is a thorny one. Drivers in Northern Virginia and Hampton Roads spend more time sitting still than they do moving during rush hour.

And that’s not the only problem.

Starting in fiscal 2002, there wasn’t enough money dedicated to maintain the state’s massive road network, which started to siphon off funds for new construction.

Former VDOT Commissioner Phil Shucet has warned that the state will have no construction money left by 2025 unless something is done.

The General Assembly convenes on Jan. 11.


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Wednesday, December 14, 2005

Warner budgets $200 million to help water plants meet strict standards; B1

By Garren Shipley
(Daily Staff Writer)

Gov. Mark R. Warner’s budget for the 2006-08 biennium will include more than $200 million to help wastewater treatment plants meet tough new environmental standards.

That’s welcome news for the area’s sewage treatment plant operators, who are facing multimillion dollar upgrades to meet new standards designed to clean up the Chesapeake Bay.

“Getting our state finances back on track has allowed us to make significant progress this year on Chesapeake Bay restoration,” Warner said at a press conference Tuesday.

The Democratic governor made his remarks flanked by Republican House Speaker Bill Howell.

“We have paired the strictest water quality regulations in the nation with the single largest investment by any state for bay cleanup, all with a 2010 deadline looming,” he said.

New rules enacted earlier this year require plants to remove more nitrogen and phosphorus compounds from their discharged water. Those nutrients contribute significantly to the “dead zones” in the Chesapeake Bay.

Warner’s budget, which will be released in total on Friday, will include $242 million for sewage and drinking water projects.

Of that, $200 million is set aside for the 92 plants in need of upgrades in the state’s Chesapeake watershed.

Upgrades paid for by the funds would remove some 2.6 million pounds of nitrogen compounds from the commonwealth’s rivers every year — about two-thirds of the reductions the state is obligated to achieve by 2010, Warner said.

Dozens of small and large plants along the Shenandoah River and its forks will have to be upgraded in the coming years, five of which are in Shenandoah County.

One of those plants is located on Stony Creek. Rodney McClain, the general manager of the Stoney Creek and Toms Brook-Maurertown sanitary districts, is staring down a $6 million upgrade to meet the new standards.

The prospect of help, in the form of grants from the Water Quality Improvement Fund, is welcome news.

“We actually tapped it to do our … optimization plan and preliminary engineering report,” McClain said. “We were able to get a 50 percent grant toward that.”

The district already had a grant application pending before Warner made his announcement.

Last year’s decision to spend some of the state surplus, $50 million, on the fund was welcome news, but “we thought, ‘Well, that’s not going to go very far when talking about a billion dollars that’s going to have to be spent,” he said.

Operators had been waiting on the announcement for some time.

“We thought it might be around $100 million, but $200 million, that’s very nice,” said Wellington Jones, the director-engineer of the Frederick County Sanitation Authority.

The authority is working to upgrade its Parkins Mill plant, which will cost somewhere around $33 million. With the new funding proposed, it’s much more likely the authority will get the $8 million from Richmond it’s hoping for.

“They’ve got something like $60 million in the [fund] this year, and they’ve got something like $350 million of requests,” Jones said, adding that $200 million over the next two years would be helpful.

With state coffers flush with cash, the spending won’t require a “flush tax” that has been talked about in other bay states like
Maryland, according to Warner spokesman Kevin Hall.

“This is just discretionary spending” to be included in the entire budget from general tax revenues, he said.

The goal, other than cleaning up the bay, is to get the upgrades rolling without causing a major spike in sewer bills across the state.

The General Assembly convenes in January.


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Tuesday, December 13, 2005

Credit report, DUI bills on the table in January; B1

By Garren Shipley
(Daily Staff Writer)

Christmas is nearly two weeks away, but it’s beginning to look a lot like January in Richmond.

Bills have been filed that would allow consumers to “freeze” their credit reports and strengthen penalties for involuntary manslaughter committed by people driving under the influence.

House Bill 34, filed by Del. Robert Tata, R-Virginia Beach, would let consumers stop virtually all releases of their credit report in an effort to fight identity theft.

A similar law in California allows those who have had their personal information stolen to stop all release of their credit information. That keeps identity thieves from opening new lines of credit in someone else’s name.

Del. Dave Albo, R-Springfield, has pre-filed a bill that would create a one-year minimum sentence for anyone convicted of involuntary manslaughter while driving under the influence.

Current law has no mandatory minimum.

Meanwhile, across Capitol Square, Gov.-elect Tim Kaine’s nascent administration spent Monday filling some seats in the cabinet.

Kaine appointed:

• Marilyn Tavenner, 54, as secretary of health and human resources. The Medical College of Virginia graduate is currently the group president of outpatient services for HCA.

• Jody M. Wagner, 50, to be secretary of finance. Wagner has been the treasurer of Virginia since 2002 and will be the first woman to hold the state’s top finance job.

“Jody played a key role in righting Virginia’s finances and preserving our AAA bond rating during the budget crisis,” Kaine said. “With her knowledge, experience, and understanding of Virginia’s economy, Virginia will stay on the right fiscal track.”

• Richard Brown, 59, to continue as director of the Department of Planning and Budget. Outgoing Gov. Mark R. Warner appointed him to the post in 2001.

Meanwhile, up in Washington, Kaine’s name came up as a potential new face for the national Democratic Party.

Mike Allen of Time magazine suggested that Kaine might be the answer to an upcoming quandary for Democrats — who to put in front of the cameras to respond to President Bush’s State of the Union address in January?

Figures popular with party activists, like Rep. John Murtha, D-Pa., who has called for U.S. troops to be withdrawn from Iraq, might not have a broad appeal outside the party.

“Democrats have decided that he can’t [do the response] because he doesn’t speak to everyone. So now I would look for a new face, like Gov.-elect Tim Kaine of Virginia to give that response,” Allen said.

But if the national party wants the new governor to make the speech, they haven’t told him yet.

Kaine Press Secretary Delacey Skinner said late Sunday that such suggestions are “all speculative.”

“He hasn’t been asked,” she said.

Political activity will heat up for one last time before a holiday break later this week, when Warner presents his last two-year budget to legislators and a Senate transportation panel meets on Friday.


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Monday, December 12, 2005

State Republicans announce reform plan for Medicaid program; A1

By Garren Shipley
Daily Staff Writer

Republicans in the House of Delegates are set to announce today a sweeping reform plan for the state’s Medicaid program.

Proposed changes to the federal-state health insurance program for lower-income and disabled Virginians will include:

• An optional health savings account plan that would allow recipients to choose their own health-care plans to be paid for by the state.

Medicaid recipients would receive a “savings account” each year with a set amount of money to be used to purchase a privately run, state-approved health insurance plan.

Based on a program being developed by officials in South Carolina, the options are designed to give Medicaid users more control over their health care.

• A “tiered” system that will create different benefit plans for different needs, such as for children and adults.

• Specialized health courts to deal with health-care issues.

• A consolidated Medicaid fraud unit, combining efforts by the attorney general’s office and the Department of Medical Assistance Services.

The package is not designed “to address anything that’s inherently wrong,” said Del. Philip Hamilton, R-Virginia Beach, who led a GOP task force studying the issue.

Compared to some states where costs have jumped by as much as 20 percent per year, Virginia’s 7.1 percent growth in fiscal 2005 and projected 3.8 percent in fiscal 2006 are relatively minimal, according to House Republicans.

“Virginia has done a good job,” Hamilton said. “When you look at what’s going on in other states, we’ve got a lot to be proud of.”

But “we want to make sure that if we have growth in this program, that it’s going to be manageable,” he said.

Rather than address the situation once Medicaid has become a budget killer — eating 40 percent of all general fund revenues in 2025 if nothing changes — delegates said they wanted to take a proactive approach.

In fiscal 1987, Medicaid took up 6.1 percent of the state’s general fund, rising to 13.8 percent by 2004, according to statistics compiled by the Department of Medical Assistance Services.

In 2004, more than 678,000 Virginia residents, or just more than 9 percent of the population, were eligible for Medicaid.

Medicaid enrollees won’t be required to adapt to all the changes, Hamilton said. But it will be an option for those who want a more active role in their health-care decisions.

The plan came from good ideas all over the country, Hamilton said.

“We didn’t need to reinvent the wheel. We looked at South Carolina and Florida,” he said. “We specifically didn’t look at Tennessee,” where a Medicaid reform plan launched in 1994 was all but ended this year by Democratic Gov. Phil Bredesen after unsuccessful efforts to contain costs and scale back some benefits.

Virginia Gov.-elect Tim Kaine told reporters in Page County on Thursday that Medicaid will be a major issue for his administration, given changes to the program at the federal level.

Kaine said he doesn’t have a specific reform plan to present as of yet, but that he’ll have Medicaid experts in his cabinet.

The General Assembly convenes in January.


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Thursday, December 08, 2005

Kaine visits Luray, talks about transportation plan; B1

By Garren Shipley
Daily Staff Writer

LURAY — Gov.-elect Tim Kaine will roll out his plan to fix the state’s ailing transportation system early next month, and it will likely include spending surplus dollars on roads.

Kaine was in the Northern Shenandoah Valley on Thursday taking care of some unfinished business — trying to wrap up visits to every school district in the state in his four years as lieutenant governor.

The Democrat visited pupils and teachers at Luray Elementary School, where he read to a pre-kindergarten class, saw a technology demonstration in a third-grade classroom and spoke with teachers.

Speaking to reporters afterward, Kaine said his administration would be ready to unveil his plan to fix road problems around the state in January.

Kaine has said his administration will draw strong connections between land-use and transportation, but hasn’t gone into a great deal of specifics yet, other than to say he’d veto new transportation funding that isn’t set aside in a “lockbox.”

“I think this year what you’re going to see is the use of most surplus dollars for transportation,” Kaine said.

Virginia ended fiscal 2005 with a $544 million balance and is projected to end this fiscal year with $860 million more.

Filling up Virginia’s “rainy day” fund and paying toward the state’s Water Quality Improvement Fund will take up most of the fiscal 2005 surplus, but the balance will likely be put toward transit projects.

Kaine said he wanted to go around the state and listen to the public on transportation issues for the same reason he wanted to see school systems — to find out what people are thinking outside of Richmond before rolling out a plan.

“We had a big budget battle over education funding,” he said. “That’s what it was about in 2004.”

“It was so valuable to be able to look at virtually every senator and say, ‘Look, I’ve been in the schools in your district. I’m not talking out of a budget book or a newspaper. I’ve been in your district. I’ve been in the schools. You want to talk about the number of trailers?’” he said.

“It helped me make the case in 2004,” he said.

Kaine said he agrees with Republicans in the House of Delegates that Medicaid reform is a serious issue for the 2006 session, but he doesn’t yet have a plan of his own to fix the problem.

The health care plan for the state’s lower-income residents now takes up 14 percent of the general fund and is growing.
House GOP officials have said reform of the program will be one of their top priorities this year, and will hold a press conference Monday to roll out their initiative.

Kaine said his administration will bring a great deal of Medicaid expertise to the table, if not a specific plan.

“With the feds cutting funding, it’ll be one of the biggest issues I’ll deal with,” Kaine said. “Right now, I don’t have my own Medicaid reform plan, but I am putting together an administration that’s going to be full of Medicaid experts.”

Kaine also said he wanted to take a close look at a request from the Virginia Retirement System to boost the amount of money school systems pay into the program.

Officials say higher payments, which would cost some school systems more than $1 million per year in additional contributions, are needed to pay benefits promised to teachers and other public employees.

“I’ve got to kick the tires and be sure they’re being accurate with the data,” he said. “We don’t want to require everyone to put more money in and find out that we’ve over-funded the plan.”

The General Assembly reconvenes in January.


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The high road: Car tax bills to rise; A1

New statewide reimbursement cap means residents will be paying more

By Garren Shipley
(Daily Staff Writer)

Your car tax bill is going up. Maybe a lot.

Starting in January, the state won’t be picking up the 70 percent of car tax bills that it had been as part of Gov. Jim Gilmore’s stalled effort to end the levy.

That means car owners will likely be paying more next year, regardless of what local governments do with their rates.
Governments around Virginia are changing their laws now in anticipation of the $950 million statewide cap for reimbursement.

The Frederick County Board of Supervisors is set to vote on its changes Wednesday, ac-cording to Treasurer Bill Orndoff.

The new bill “parallels what the taxpayers are very used to now,” he said, with the exception that the percentage of the bill covered by the state will change — and not for the better.

Shenandoah County is adopting many of the same changes, said Treasurer Cindy George. A public hearing is set for Dec. 20.

“The taxpayer isn’t going to see anything any different other than the percentage that’s covered by the state,” she said.

As of now, that looks to be about 62 percent for Shenandoah County residents, George said, but that could change well into next year.

The new law sets a deadline of March 31 for the Auditor of Public Accounts to complete the calculations and tell local governments what they’ll be receiving.

Legislators voted to divide up the $950 million among the cities, counties and towns in the state based on the percentage of relief they got in 2005.

That means a higher bill.

For example, a 2001 Honda Civic assessed at $11,600 in 2005 incurred a $99.53 bill at the county’s current rate of $2.86 per $100 of assessed value.

While the value of that car is likely to decrease before the 2006 tax bills are issued, at 62 percent reimbursement, the owner of an $11,600 vehicle would pay $126.07 — an increase of 27 percent. For a $20,000 car, the bill in Shenandoah County would increase from $171.60 to $217.36.

Residents of places like Winchester, where the City Council voted earlier this year to double the effective rate of the tax to pay for renovations at John Handley High School, will see their bills more than double before depreciation.

That’s the general rule around the commonwealth, Orndoff said. More cars or more expensive cars mean higher bills for everyone.

“In growing localities where the population [and the number of cars] is increasing, the share of state relief will continue to go down,” he said.

Legislators gave local governments a lot of flexibility with the car tax relief that’s left.
It all started in 2004, when the General Assembly was faced with what members were told would be a major budget shortfall.

Members eventually passed a $1.5 billion tax hike and moved to cap car tax relief at $950 million per year starting in 2006.

“Legislators didn’t have a choice,” Orndoff said. The car tax relief had turned into a major draw on the treasury.

The bill “had grown far more than they ever expected it to from the original plan,” he said.

Virginia’s financial fortunes have since taken a major turn for the better.

In fact, the commonwealth is likely to be sitting on more than $860 million in surplus at the end of the fiscal year — just $20 million shy of the entire cost of the car tax abatement program in fiscal 2004.

But don’t look for any major effort to try to put a final stake through the car tax’s heart.

The Republican side of the House of Delegates is the home to the most vocal and active group of tax cutters in the General Assembly, and there’s no plan in that camp to try to reverse the trend.

“We don’t have anything planned for the car tax,” said Del. Clay Athey, R-Front Royal, the chairman of the House Republican Caucus policy committee.

On the Senate side, leaders have warned against adding major new expenditures to the “base budget,” which includes the $950 million set aside for car tax relief.

The General Assembly reconvenes in January.


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Tuesday, December 06, 2005

House GOP calls for reform of Medicaid; A1

By Garren Shipley
Daily Staff Writer

The buzz in Richmond might be about transportation, but Republicans in the House of Delegates want to spend some time in the 2006 session talking about Medicaid reform.

Medicaid spending is a huge part of the state’s bottom line — 14 percent of the general fund budget, according to documents compiled for the Senate Finance Committee.

That’s one reason the GOP caucus intends to push reform legislation next year, said Del. Clay Athey, R-Front Royal, the chairman of the House Republican Policy Committee.

Athey announced a short list of legislative priorities for the 2006 session late Monday.

“We will focus on holding the line on taxes, protecting private property rights and controlling budget growth,” he said.

One way Republicans intend to do that is through Medicaid, the federal-state program designed to provide health insurance to the poor.

The GOP caucus will work to reform “this often abused government program … by retooling it and empowering recipients with more direct knowledge, opportunities and control with Medicaid Health Savings Accounts,” Athey said.

Virginia is in better shape than some other states, however, with single-digit cost growth rates over this biennium, 7.1 percent in fiscal 2005 and on track for a growth rate of 3.8 percent in fiscal 2006, according to figures from the House of Delegates.

Still, that represents a forecast increase of more than $500 million in the next two-year budget over 2004-06.

If that pace continues, the program will eat up 40 percent of the entire state budget by 2025, Athey said.

Virginia has already tried some Medicaid reform with success.

The commonwealth implemented a “preferred drug list” for Medicaid prescriptions in 2004. That effort to steer patients toward lower cost medications and other pharmacy efforts has saved taxpayers $35 million in fiscal 2005 alone, according to a report by the Department of Medical Assistance Services released last month.

The GOP hasn’t yet gone into detail about how its version of savings accounts would work, but both Florida and South Carolina are taking a private-enterprise, savings-account approach to the problem of rapidly growing Medicaid bills.

Gov. Mark Sanford, R-S.C., has submitted a plan for federal approval that, at its most basic level, would give Medicaid recipients a “savings account” with a set amount of cash each year.

Enrollees could then use that money to buy medical coverage under a state-approved plan, or to pay for health insurance through their employers.

Another option would allow some to purchase only “catastrophic” coverage and use the balance of their accounts to pay for services directly.

One of South Carolina’s major goals with the plan is to get people out of the emergency room for primary care.

“When you have Medicaid patients visiting the emergency room 66 percent more often than other South Carolinians, coupled with a program that’s on pace to consume almost 20 percent of the state budget,” Sanford said earlier this month, “it’s clear real reform is needed to make sure this program grows at a sustainable rate so that people get the care they need.”

Cost control is another major goal of the effort. Budget officials say increasing Medicaid costs will eat 47 percent of all new revenue in the state budget in 2007, taking all of it and then some by 2010.

South Carolina applied for federal permission to implement the plan last month.

But it’s not the first state south of the Mason-Dixon line to try Medicaid reform.

In 1994, Tennessee officials started TennCare, an effort to bring down costs by allowing private insurance companies to provide competing insurance plans for Medicaid patients, with the state picking up the bill.

Cost savings wrought by competition among private firms would be used to expand the program to lower-income residents without insurance who weren’t eligible for standard Medicaid and the “uninsurable,” those with chronic medical conditions that couldn’t be covered any other way.

It didn’t work out quite the way backers thought it would.

A rash of lawsuits over access to benefits, prescription drugs and fraud — or mismanagement by the state government, depending on who answers the question — kept the program from realizing any real savings.

Just more than a year ago, Tennessee Democratic Gov. Phil Bredesen announced that more than 400,000 people would be dropped from the program to contain rapidly growing costs. That number was later revised downward to more than 100,000.

At its height, the program covered almost one out of every four people in the state, each of whom got an average of 30 prescriptions filled per year.

Bredesen laid the blame for the “meat ax” approach to reform at the feet of those suing the state.

“The reason that these lawsuits and consent decrees have taken on such importance is that many of their provisions specifically gut our ability to use the management techniques — such as prior authorization — that other states and commercial plans today routinely use to control costs and frankly improve care,” Bredesen said at the time.

The Virginia General Assembly convenes in January.


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Friday, December 02, 2005

Virginia’s projected budget surplus totals $860 million; A1

By Garren Shipley
(Daily Staff Writer)

If current projections hold true, Virginia will end the current fiscal year on June 30 with a healthy chunk of money left over — $860 million.

What should be done with that money, or even what to call it, is a matter of debate among local legislators, who say that’s a preview of what’s coming in Richmond.

A healthy housing market and supercharged federal procurement in Northern Virginia have the general fund riding high, according to staffers at the Senate Finance Committee.

Surpluses in fiscal 2003, 2004 and 2005 are all part of the rebound the state economy has experienced since the downturn of 2001 and 2002.

“Surprise, surprise,” said Del. Clay Athey, R-Front Royal. “[Republicans in the House of Delegates] predicted that two years ago, and it’s come to fruition.”

Three years of surplus makes the need for the $1.5 billion tax hike in 2004 questionable, Athey said, but Republicans aren’t likely to try to roll them back.

Polls taken during the gubernatorial race found that the budget deal had the support of a majority of voters.

“That’s behind us now, and obviously we have $2 billion in additional funds that we can spend,” Athey said.

Senate staffers and some senators have suggested that the 2006-08 biennial budget should be constructed without adding much at all to the “base budget” — the amount of money needed to fund ongoing programs.

Surplus revenue has so far come from places that could turn south in a hurry, such as corporate taxes and fees charged for recording deeds and wills.

House Republicans would like to see something other than new programs created with the money.

“My thoughts are that we should either return that money to the people who paid it, and or invest that in new transportation spending,” Athey said.

“It would surprise me greatly if the Senate would ever support any kind of tax decrease,” he said.

But there are calls for “fiscal responsibility” other than tax hikes coming from the upper house these days.

Proposals for one-time spending on transportation, capital facility maintenance or funding for better wastewater treatment along Chesapeake Bay have been suggested as ways to spend such “one time” funds.

Even one of the main drivers behind the 2004 tax hike, Sen. John Chichester, R-Fredericksburg, told his colleagues at a retreat earlier this month that Virginia has to take a hard look at the spending side of the equation.

“Typically, we ‘clean house’ about once a decade — when we experience a recession and have to cut budgets,” he said.

“That’s not often enough. We must continually evaluate our operations and services, and prioritize programs, assessing their impact and value,” he said. “Before we take on new spending obligations, we must look for opportunities to shed outdated services or programs.”

Cleaning house is a great idea, added state Sen. H. Russell Potts Jr., R-Winchester. The former independent gubernatorial candidate said he’d even support “zero-based budgeting” for government agencies.

Zero-base budgeting doesn’t automatically assume that departments need the same amount of money they got last year plus a little more. Instead, it requires them to justify their total budgets every year.

“I think that’s a very noble and a very good suggestion,” Potts said. “I said numerous times on the campaign trail that I believe in zero [based] budgeting.”

That being said, though, Virginia doesn’t have a surplus, he said. It has cash in hand and “bills in the drawer.”

“You never have a surplus when you have obligations,” he said, pointing to needs in K-12 education, colleges and universities, Medicaid and the Chesapeake Bay cleanup.

“Our obligations and our expense sheet is out of balance with what our income is,” Potts said. “It’s an illegitimate claim that we” have a surplus.


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