The amount of this year’s supposed surplus? $311 million.
But before you jump to the conclusion that Governor McDonnell has provided sound fiscal stewardship for the state, you need to get all the facts.
Each year, the General Assembly is supposed to make payments to the Virginia Retirement System (VRS), a pension fund for state employees. For the past two years, the General Assembly, along with Governor McDonnell, have neglected making these payments in full, allowing VRS to be underfunded. Currently, the state owes around $620 million to the VRS.
Conveniently, the payments are being skipped until 2013, the year that Governor McDonnell leaves office.
As Virginia political blogger Doug Mataconis put it, “Here in Virginia we have a ‘surplus’ of $311 million. That money will go, by law, in to education funding and into the state’s ‘rainy day’ fund. In reality, though, is what we’ve got a cooked set of books that says ‘+$311,000,000’ with a little entry at the bottom of the page that says ‘I.O.U. $620,000,000.00.’”
To make matters worse, this type of budgetary gimmick is being praised as a model that other Chief Executives around the nation should follow.
Peter Wehner of Commentary Magazine wrote, “Governor McDonnell is among the most effective and popular governors in America. He has provided an example for how to effectively govern in a state where one legislative chamber (the Senate) is controlled by Democrats and the other (the House of Delegates) is controlled by the GOP. At a time when public cynicism about our lawmakers is near record levels, it’s encouraging to see chief executives like McDonnell, who know how to provide strong, conservative leadership – and in the process make their states models of success.”
Mr. Wehner is correct that Governor McDonnell has provided relatively good leadership for Virginia. But to encourage other Governor’s to duplicate his budgetary gimmicks is just plain irresponsible.
Somewhere down the road, the next Governor of Virginia (McDonnell is limited to a single four year term) and a future General Assembly will have to figure out how to make payments to the VRS. That debate will be a feisty one, as the GOP and Gov. McDonnell himself will be tarred and feathered over their financial mismanagement of the taxpayer’s money.
Democratic Party of Virginia Chairman Brian Moran was at least partially correct when he stated, “This is a surplus built on gimmicks, borrowing and shortchanging investments in Virginia’s future.”
The VRS cannot be underfunded forever. The state has an obligation to make the payments, and to use budgetary gimmicks for political gain is akin to digging ones own grave.
Some day, the budgetary gimmickry of Governor McDonnell will catch up to him, and he better hope that the state can afford to make the payments when the bill finally comes due.