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VA: McDonnell’s Christmas gift of more spending adds to mushrooming state budget

By Kathryn Watson | Watchdog.org Virginia Bureau

ALEXANDRIA — Gov. Bob McDonnell has yet another Christmas gift for taxpayers: He plans to spend more of your hard-earned money and issue more debt to saddle your children’s generation.

McDonnell’s budget amendments for 2014 and a new report on state spending from 2003 to 2012 have a running theme. The former is a blueprint for spending more taxpayer dollars, the latter is proof that the commonwealth is already spending said dollars at a rate faster than inflation and population growth.

“In these difficult times for Virginia and our country, state governments are called upon to lead the nation in fiscally responsible decisions that address the core concerns of our citizens without rhetoric, unsustainable spending practices and gridlock as displayed by our leaders in Washington,” said McDonnell, who touted his budget-managing skills before the Legislature’s joint money committees Monday.

While McDonnell proposed $524 million in agency savings and cuts in his budget amendments this week, he still managed to add $735 million in new spending, and $200 million net, to the budget. Never mind that he requested $200 million in new bonds for improving water quality, adding to the state’s roughly $64 billion debt.

Audrey Jackson, state director for the right-of-center Americans for Prosperity, said her group was, “a little surprised to see the budget increase again,” on top of what was already the state’s largest biennial budget in history. And while $200 million may seem like a drop in the bucket for state government, it all adds up, she said.

“There’s not a revenue problem; there’s a spending problem,” said Jackson. “It always has been, and it seems that at about every level of government, we continue to see that.”

“… Overall, we think the governor does a fine job,” Jackson said. “And I think we see eye to eye on about 90 percent of everything that the governor has produced. But when we see an increase in the budget, it does make us a little concerned for the bottom line of taxpayers here in Virginia.”

But spending hikes are nothing new in the commonwealth, where, even accounting for population growth and inflation, annual spending has soared 18 percent over the past decade, according to the General Assembly’s watchdog branch. In 2003, the budget was roughly $25 billion, according to the Joint Legislative Audit and Review Commission’s 2012 update of its Review of State Spending report. In 2012, it was roughly $40 billion.

Where is the bloat? Well, ever-expanding expenditures in Medicaid andDepartment of Education staffing are the biggest culprits, judging from the list of fasting-growing departments in state government. And other departments are making cuts to accommodate them.

“Medicaid is second only to K-12 education as the largest driver in the state budget and comprises approximately 20 percent of the general fund budget; mandatory growth in the program will demand significant, additional resources,” explained McDonnell’s chief of staff, Martin Kent, in a November email request to state agency heads requesting their proposals for 4 percent agency budget cuts.

The Department of Medical Assistance Services, which handles Medicaid, has mushroomed by 1,600 percent over the past 30 years, according to McDonnell’s remarks to the joint money committees.

But as McDonnell pointed out, the Department of Education is right behind Medicaid. Never mind the 2 percent pay raise for teachers McDonnell included in his recent proposal — Virginia’s public schools lead the nation in non-instructional spending.

As Watchdog.org originally reported, Virginia’s public schools boosted non-instructional positions by 100 percent from 1992 to 2009. That’s nearly five times more than the growth in student enrollment and almost 10 times the increase in teacher hiring, according to the Friedman Foundation for Educational Choice, which published the report, “The School Staffing Surge.”

“These numbers are jaw-dropping when they stand alone. Attach them to salary and benefits costs and they become jarring,” Amber Winkler, vice president for research at the Thomas B. Fordham Institute, an education-reform think tank, told Watchdog.org.

McDonnell said he aims to boost the proportion of “classroom and instructional spending” — from the currently almost-64 percent to 65 percent. It used to be 61 percent.

Once the chaos of the so-called fiscal cliff blows over, state leaders need to hunker down to further eliminate waste, said Mike Thompson, president of theThomas Jefferson Institute for Public Policy

“I think once we get through this next few weeks, there really should be a focus on more efficiency in government,” Thompson told Watchdog.org. “We can always find it. It’s always there.”

Now, the opportunity to find those efficiencies rests with groups like AFP and the General Assembly, said Jackson.

“I think that’s the beauty of the legislative process,” she said

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