06.30.2010 0

The Surplus In Virginia Is Not Real

  • On: 07/18/2010 20:44:25
  • In: Economy
  • By Bill Wilson

    This week there were cheers heard throughout the Commonwealth of Virginia. Governor Bob McDonnell jubilantly proclaimed that the state had achieved a budget surplus. There’s only one little problem. It is not true.

    Simply put, the surplus announcement is nothing more than the final act in a well-constructed play. It’s political theater aiming to yet again pull the wool over the eyes of the public while kicking the problems down the road for future legislative sessions to deal with. In short, it is the same old rancid political game that got our nation and Virginia into the fiscal mess in the first place.

    Just a quick review will show how the politicians in Richmond, men and women of both political parties, constructed their con.

    As part of the budget earlier this year, the General Assembly and the Governor managed to “balance” the budget by skipping payments to the Virginia Retirement System (VRS) to the tune of $620 million. Government entities will have to pay it back at some point with interest. But what will the politicians do when they can’t? The fact is, the budget was “balanced” by cheating, by setting up a default on the Commonwealth’s commitment to public employees.

    Whether the benefits and the VRS plan itself are overly generous or not is beside the point. A contract has been made with those workers in the name of the People of Virginia. And that contract has to be honored. What the politicians did was take the money meant to honor that contract and use it for other spending. If the average person does that it is called embezzlement. I guess politicians use a different vocabulary.

    On the one hand, the Governor and General Assembly pilfered $620 million and then proclaimed joy at having $220 million left over. Other games of chance that use this very same device are called three-card Monty or the shell game.

    For just a moment let’s accept this scam. The General Assembly and Governor McDonnell can claim the $220 million “surplus”. Perhaps they should use the money to pay back the sum taken from the VRS, thus reducing the amount owed. Is this the reasonable approach that Richmond responded with? No. They immediately spent it on handouts. Bonuses for state employees were first on their list. The reality is, this the money was squandered.

    The cynic would say the Governor and the General Assembly wanted to increase spending when they were doing the budget but knew the People would not tolerate it. So, with a wink and a nod, they contrived this Ponzi scheme to do it out of the glare of public attention and with the magic words “surplus” ringing in people’s ears. Maybe it is not the cynic, maybe just the realist.

    As disheartening as this episode is — the early broken faith with the People and his own word by Governor McDonnell — it portends even worse problems ahead. There is a growing realization that the Pelosi radicals are harming America. The voters appear to be poised to hand a majority in the U.S. House of Representatives to the Republican Party. But what will the country learn from this move?

    Has the GOP learned from its brief exile the error of its past mistakes? Will a future Republican Majority change its spendthrift ways and end the sleight-of-hand games and disrespectful abuse of the people? Can the public count on them to honestly face the fiscal dangers and address them in an open and forthright manner? The early signals from Virginia are not promising.

    Hopefully any new Republican majority will find a better model.

    Bill Wilson is the President of Americans for Limited Government.


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