Governor to state employees... you'll have to pay for state's mismanagement

According to a recent study commissioned by the General Assembly, the Virginia Retirement System (VRS) is underfunded by $18 billion. In his budget proposals, Governor Bob McDonnell will likely tell state employees to pick up some of the tab for restoring the system. With pay raises unlikely, that will be a pay cut for the Commonwealth's workforce.

One might ask why the VRS is ailing. Well, the simple and honest answer is because for several budget cycles the General Assembly and governor have cut the state's, local governments', and school boards' contributions below what was prudent to maintain a viable system able to meet its obligations. They've also borrowed from VRS to patch holes in the budget. They assured everyone that these actions would not endanger VRS' balance sheet. Due to policymakers' own actions the VRS is in some difficulty and those same policymakers want someone else to pick up the tab.

If that sounds unfair... it most definitely is. A quarter century ago the state (also most local governments and school boards) picked in the employees' 5% share of the contribution in lieu of a pay raise. In response to some skepticism, policymakers promised it would be permanent. Then last year legislation passed requiring new employees to pay that 5% themselves. At least newbies understood the deal when they took the job. Now the governor wants all employees to pick up (as yet undisclosed) some of the so-called "employees' share." If the state does so, it is probable that local governments and school boards will follow suit - like state employees, most teachers, police, and other local employees would effectively face a pay cut after several years without pay raises.

The governor's proposal is bad policy that breaks faith with the men and women who perform valuable services for the citizens. The General Assembly should reject this idea, restore rational contribution rates for VRS, begin paying back money borrowed from VRS, and delay funding new pet projects of the administration until current obligations to VRS are met.

Trickle down budget writing

In its infinite wisdom (and as a great illustration of how all sh*t flows downhill), the General Assembly has passed a budget that allows local governments and school boards to require current employees to pay from 1% to 5% of the "employee retirement contribution." This provision in the budget does not affect state employees.

The General Assembly has dramatically underfunded local schools - for example, I just heard on the news that Augusta County Schools will have some $11 million less to operate on next year when compared to this year. To make up the difference, a local school board can start making employees contribute to the Virginia Retirement System. Some 20 years ago most local school boards picked up the so-called "employee share" of the contribution in lieu of a pay raise. It was supposed to be permanent... forever and ever, amen.

I'll break this down in simple terms that even Republican budget writers can understand - you underfund local school divisions, but you thoughtfully give them the power to find new money to help fill the gap you created from somewhere, from anywhere... why not scrape it out of employee wallets. Now, that's what I call trickle down budgeting... it really does all flow downhill.

Schools, VRS, public safety take heavy hits

The first reports about the Virginia General Assembly's budget actions are hitting the media and everything is a bit sketchy. The Senate gave in to the House on a majority of the fee increases so many of the cuts hit bone. Some emerging details:

• K-12 education will see $646 million less over the next two years meaning teacher/staff layoffs, school closings, and larger classes. Apparently the Senate held tough and prevented the even more drastic cuts proposed by the House of Delegates.
• As predicted in an earlier post, judges who retire or die will not be replaced. Full dockets. Backlogs. Irate citizens. Justice delayed. Justice denied.
• Although some of the worst proposals for the Virginia Retirement system were averted, the system takes still another hit. In the past couple of years the state has underfunded the retirement system and now the General Assembly is borrowing $620 million from it. I don't trust them to repay it - do you? What recourse will members have - can we sue the bastards?
• $1 billion was cut from health programs. Only 250 additional adults with mental disabilities will receive community-based services - the waiting list tops 6,000. A human and a public safety disaster.
• Funding for sheriff's offices drops by 6%. Expect slower response times, a reduced presence of resource officers in schools, and fewer crime prevention programs.

But rejoice. The rest areas are reopening even as the potholes grow big enough to gobble up a Prius. Maybe the pedal will stick and it will fly over it!

Guns... here, there, everywhere

With a number of legislators introducing bills to permit carrying of guns in restaurants and bars, courthouses, houses of worship, etc., why hasn't someone introduced legislation to allow carrying of concealed weapons in the galleries of the General Assembly?

Feeling the sting

With the budget deliberations not yet finished in Richmond, local school divisions are deep into crunching numbers and getting ready for fewer teachers and other staff, and for larger classes. With most school divisions' budgets heavily weighted towards personnel - typically 75 to 80% (or more) goes to salaries and benefits - the cuts this year will mean paring down the employee rolls. Most school divisions are trying to do that in as gentle a way as possible, but when the knife cuts to the bone, there is bound to be pain.

One way to pare costs is to encourage experienced teachers to retire and leave positions vacant or replace them with "cheaper" new hires. But, how to do that? Some teachers enjoy their work and involvement with children and are not ready for retirement. Others need the paycheck. The cost of health insurance is a huge concern for almost everyone. Retiring before 30 years of VRS service means taking a hit (which grows when multiplied by the number of years under 30) on the pension. So, school divisions are offering financial incentives to help ease some of those very real fears.

Augusta County has a retirement bonus of $200 per year of creditable VRS service up to $6,000 for staff age 50 and up who retire between March 1 and June 30. They already pay $2,500 towards retiree health insurance (subject to certain stipulations) which helps to ease that concern. Still, there is doubt that $6,000 is enough to attract very many who were not already pretty close to a retirement decision. For anyone under 30 years of service, the hit on VRS benefits likely weighs heavier on the calculations than that one-time payout.

The Staunton Public Schools, which is probably going to close one elementary school, has a more generous retirement incentive. Ditto for Waynesboro - $300 per year of service, up to $9,000. Shenandoah County is considering one. The story is pretty much the same everywhere - get rid of teachers and other staff to save money. Roanoke City and Roanoke County are offering larger buyouts - the city's maxes out at $20,000 and the county's at $12,500.

Statewide, the respected budget analysts at the Virginia Education Association, estimate that the Senate budget will cost almost 16,000 jobs; the House budget about 24,000. These wouldn't be just teachers, but include everyone from cafeteria workers and custodians to assistant superintendents. With the budget likely to fall somewhere in between, job losses of somewhere around 20,000 are likely. I'm sure with less money the fine folks in the General Assembly will relax some mandates, perhaps suspend SOL tests for a couple years, and help in other ways. Do you believe in fairy tales?

Nobody expects the retirement incentive programs to reduce staffing by anywhere close to those numbers so teachers who are not on continuing contract (three years of satisfactory service in the same school division) are holding their collective breath and wondering if they will receive a reduction in force notice. We can probably expect many to be issued, followed by an night of fear, anger, and tears. Hopefully, some will be rehired if the number of retirements is higher than expected or the budget improves. So, you DO believe in fairly tales?

There is some lip service to class size and maintaining the quality of instruction, but - so there is a Puff the Magic Dragon? - have no doubt, classes will be larger (some to the point of chaos), students with special needs will have less support, many of our best and most experienced teachers will be gone, new teachers will be asked to teach subjects for which they are not prepared, and our children will ultimately pay the price for the bad economy and failures of vision in Richmond. First lesson... life isn't fair.

Birds in flight... or, fright?

Breaking precedents of governors of both parties, Bob McDonnell has embarked on a new strategy designed to cover his backside from blame for budget cuts. Instead of offering his own budget amendments, McDonnell is recruiting fellow Republicans in the General Assembly to introduce bills and suggest the cuts. His conversations with the flock are behind-the-scenes and keep his chicken scratch off the record of cuts, many of which will prove to be unpopular.

For his part, the governor says it is a "different strategy" and predicts it will be productive. Could be, I suppose... at least for his political purposes. In this environment deep cuts are inevitable and he will eventually get (as required by the Virginia Constitution) a balanced budget. But, McDonnell's fingerprints won't be on the cleaver as it hacks to the bone. Good strategy for him, but it may leave some GOP delegates and senators with uneasy questions to answer. Still I gotta think he's getting Valley legislators to suggests cuts in NOVA or Tidewater and vice versa. And, many of those cuts may hit Democratic districts harder than those with a Republican legislator.

Because all this is behind closed doors, how are we to know what specific spending cuts the governor supports or doesn't? Government operates best in bright sunlight. But, like a fox in the hen house, the governor's strategy is one of stealth carried out in the shadows. When the broken eggs are discovered by Virginians, he'll simply say "why ya lookin' at me?"

Beware unintended consequences

Delegate Lacey Putney (I-19th District) is chair of the House Appropriations Committee. He has a suggestion for the upcoming session of the General Assembly, an intermission of sorts:

The possibility of coming into session, maybe recessing, let the members go back, except the money committees working on the budget, in order to give us time to see what they're going to do in Washington.

Putney's idea was hatched as the Appropriations Committee considers a $77 billion budget amid uncertainties over healthcare reform in Washington, D.C. Depending on if and what kind of bill is passed could have direct impact on the Commonwealth's budget. So a pause for more up-to-date information makes sense from the perspective of Richmond.

But, beware of the unintended consequence of passing an interrupted timeline on the local governments and school boards. Typically, city councils, boards of supervisors, and school boards are deeply immersed in their own budget writing after the first of the year, a process that continues well into spring with required steps including public hearings. School boards are supposed to submit budgets to city councils and boards of supervisors by April 1. Since the General Assembly is developing the state budget during January and February, school boards always find themselves working with estimates of state funding rather than hard numbers that are available only after the House and Senate reconcile a budget at the very end of the session.

Putney's idea would indeed buy time for Richmond budget writers to factor in the ramifications of actions in D.C. But, if the General Assembly recesses for an extended period of time it will place greater uncertainty (above and beyond expected budget cuts) and and time constraints on local budget deliberations. Obviously, there are ways to work around these issues, if the General Assembly decides that a "Putney recess" is in order. Now is the time to think about dealing with possible unintended consequences that could get passed on to local officials. Like an unfunded mandate?

Time to turn off the wireless?

Perhaps we should turn off the wireless in the State Capitol during floor sessions of the Virginia General Assembly? Or at least install a good firewall like used in schools.

According to student journalists at the Capitol News Service @ VCU, a number of delegates were surfing the web rather than paying attention to the debates and votes that affect all Virginians. Yes, our esteemed "leaders" were found visiting friends on Facebook, shopping for guns and furniture, checking out Civil War relics, and instant messaging. Staunton Delegate Chris Saxman was engrossed in the The Drudge Report.

Come on guys and gals, this ain't middle school. We send you to Richmond to do the people's business, not shop till you drop, social network, or read online tabloids. Besides, even lowly state employees can be disciplined for using state computers for playing games, surfing the net, or visiting irrelevant sites during business hours - shouldn't the same rules apply to the big birds? Cluck!

Shootout at the Richmond Corral?

Governor Tim Kaine vetoed a dozen bills, most expanding the death penalty or allowing concealed weapons in more places. Through the years, the governor has been very consistent on these issues and the vetoes shouldn't have surprised anyone. It is likely the General Assembly will uphold most of the vetoes. Most likely overrides are the bills dealing with the death penalty for a person convicted of killing a fire marshall or auxiliary police officer, allowing retired law-enforcement officers to carry concealed weapons into bars, and one exempting active-duty military from a state law limiting handgun purchases to one a month 

A bigger battle looms over the question of taking about $125 million in federal stimulus money for expanded unemployment benefits. What's the fight about... seems like a no-brainer? To accept the money, Virginia would have to change laws to allow part time workers who get laid off to receive unemployment compensation.

Democrats generally support taking the federal money to help the increasing number of unemployed all across the state. That money won't just sit in their bank accounts - it will be spent in communities for food, clothes, and all sorts of necessities thus helping to stimulate the both the local and national economies.

Republicans are saying whoa... not so fast. Siding with the Chamber of Commerce and the National Federation of Independent Business, they say it will increase red tape (the second most recited chant of conservatives) and will increase spending by the unemployment trust fund that may lead to higher taxes (guess what their most recited chant is).

But, this issue may not be quite as simple as Democrat v. Republican. Some GOP delegates from areas with rising unemployment are facing constituent pressure to support taking the federal stimulus money. This is an election year for all delegates - both incumbents and challengers will be looking to make political hay on this one.

And there is one other lingering question - will the legislators fill judicial slots left unfilled during the regular session? A failure to do so will leave a smudge on a central premise of democracy - justice.

Maybe now

The News Leader's headline story today is about a Staunton attorney being a defendant in a $1.4 million lawsuit. The attorney is also up for appointment as judge for the Staunton and Augusta General District Courts. While I have no idea about the merits of this suit, the fact of its existence appears to place a cloud over his potential selection.

The judgeship should not be allowed to remain vacant while legislators wrangle. Nor, should a decision be held hostage to the resolution of this suit - which could take months or years. Maybe now this person might withdraw from consideration thus helping to end the gridlock over this appointment so the vacancy can be filled at the reconvened session.

Fox in the General Assembly Hen House

Predatory payday and car title foxes appear to have again snuck into and out of the Richmond hen house with all the eggs.

CCC has often commented (here's one) on the payday and car title lenders shameful practices that rip off consumers - usually ones who have fallen upon hard times and don't take time to understand the consequences of dealing with these predators. This year, our lawmakers, who are supposed to look out for the common good, have again helped these foxes to all the eggs they want.

This session there were bills to regulate these lenders and to end the use of open-end loans which came into use as a way to dodge last year's weak regulations. The industry responded by deploying a dozen or more lobbyists to prowl the halls and elevators of the General Assembly Building, reminding legislators of past campaign contributions and the promise of more to come. Lobbyist Jeff Smith, representing the Virginia Financial Services Association, a group representing small lenders which are not involved in payday or car title lending, warning that the bills would knock those lenders out of revolving loans and could affect employment at HSBC, a British bank with a processing center in SE Virginia.

Smith was either wrong or conveniently misrepresented the truth - HSBC would not be affected by the bills. More troubling is Smith's apparent amnesia about his also representing Consumer Loans of America, one of the nation's largest payday and car title lenders.

It is easy chop off Jeff Smith's head for his "lobbying" activities. But, it is far more appropriate to ask our legislators what the cluck they are thinking. Or, if they are thinking at all. I guess they were just too busy denying the right to vote to former felons, making sure Virginia remains a right-to-work state, and teaching elementary kids about all the benefits of marriage to enact some reasonable restrictions on these vicious predators.

More info in prior posts and here.

Democracy and elections II

Two bills that encourage greater voter participation are moving forward in the Virginia General Assembly. 

HJ 628 (Ware) would restore voting rights for non-violent felons who have completed their sentences. It passed the House Privileges & Elections' Constitutional subcommittee by a vote of 4-3 and is now before the full Privileges & Elections Committee. Contact committee members and urge them to support restoration of voting rights! More info at CCC.

SB 810 (Howell) early allows voters to vote absentee in-person without providing a reason. It will probably come before the Senate next week. Contact your Senator to support SB 810. More info at CCC.

Hey Richmond: I told you so

Hate to say "I told ya so," but I and many others told the 2008 session of the General Assembly that their toothless reforms of the payday loan predators wouldn't do any good. Now, Senator Phillip Puckett (D-Russell Co.), one of the key supporters of that compromise legislation, says:

"They [payday lenders] are circumventing what we tried to do. That sends the wrong message, not a very good-faith effort on their part - and I'm one of the guys that fought for them."

To dodge the regulations that they "agreed" to, payday lenders have created a new product called an open-ended line of credit which has no limits on interest rates or administrative fees. Interest rates can top 300% a year and the fees can be oppressive. Of course, you have to be a wily and wise consumer to spot all this in the fine print.

The bastard cousins of payday lenders are the car title lenders. Virtually unregulated under Virginia law, car title lenders entice people with ads showing them buying new clothes or taking a vacation... just bring in your car title (and a set of keys for the day we repossess your wheels) and walk out with a fist full of green! Car title lenders charge interest of 25-30% per month. If the borrower pays only the minimum he gets to keep the car, but his debt can double in six months. Fail to pay the minimum and you'll be walking.

Senator Puckett was shortsighted and too trusting of the wolves last year, but has now seen the light and wants the General Assembly to take action. Senator Mark Herring (D-Leesburg) introduced SB 1490 that would cap car title lenders and anyone making loans under the opened-ended credit laws to a 36% APR. It is in the Commerce and Labor Committee. More info.

But, just a year after the payday loan battles ended with a wimpy law, and in a session where the budget is sucking all the media and legislators' attention, there may not be much will to act. Terry Kilgore (R-Scott Co.), chair of the House Commerce and Labor Committee which handles such bills, was noncommittal. Senate Majority Leader Richard Saslaw (D-Fairfax), who is cozy with payday lenders, has introduced a bill providing more cover for the industry. He would prohibit a company from offering both payday and open-ended laws - so his buddies will just offer the usurious open-ended ones.

Not taking any chances, the industry has lavished cash on legislators. According to the Virginia Public Access Project, Loan Max, the biggest of the title loan lenders, has donated $530,000 since 2002, about equally split between the parties. The three biggest payday lenders have ponied up $370,700 over the same period.

Hey Richmond! We'll be saying "I told you so" again in 2010 if you shirk your duty this year. We may talk to members of the House of Delegates in November! Do the right thing - put a cap of 36% and reasonable limits on fees (better yet, require they be computed as part of the APR). SB 1490 seems like a good place to start.

Political pandering 101

Senator Ralph Smith (R-22) wants Virginia's "family life" curriculum to expand and teach about the "benefits of marriage for men, women, children, and communities." SB 827 would mandate that instruction along with such topics as abstinence, avoiding sexual assault, and family relationships. Smith thinks it will reduce divorce and save the state "hundreds of millions of dollars." It is being pushed by the Family Foundation of Virginia.

You must be a dumb cluck if you really believe this bill will save any money or that it will even reduce divorce. It is at best redundant to instruction already required; at worst it will foster a belief among some young students that single parent families or children of divorced couples are lesser human beings - less good than traditional mom/dad/two kids families.

Like a chicken getting readied for dinner, SB 827 should get the axe.

Rainy Day

The Virginia Association of School Superintendents will hold a press conference today urging the General Assembly to use $500 million from the state's "Rainy Day Fund" for K-12 education as Governor Tim Kaine has proposed. Even if that money is used, Virginia schools are facing about $400 million in cuts in state aid. With 80% of most school budgets being related to personnel, VASS contends larger funding cuts will mean teacher pay cuts and/or layoffs directly impacting instruction of students.

MEMO TO THE GENERAL ASSEMBLY

It is not just raining, it is pouring. These were the times for which the Rainy Day Fund was created. Use it prudently, but use it!

Two clucks; one chicken pox

This is a special week with Martin Luther King holiday (and the national day of service) and the Inauguration of Barack Obama. Pick your theme: "Yes, We Can" or "We Are One." With the exception of a few sore losers or perennial pessimists, American seems to be rising through the adversity of recession and war with a abiding belief in the possibilities of our future as evidenced in the uplifting experiences of our nation's past. We'll learn plenty of history about inaugurations and presidents over the next few days. But, our hearts and souls will sing with the new president as our hopes rise for our nation's, indeed the world's, future.

Hopefully, you'll find a little time for community service today. Clean up a road, donate time or money to a food pantry, help an elderly neighbor, donate blood... the list it long and the needs great. Don't make it a one day deal - keep it up throughout the year.

It a time when even Washington D.C. is in a rare bipartisan mood (hope it lasts a long while) and Governor Tim Kaine made a remarkable State of the Commonwealth speech reaching across party lines to find solutions to Virginia's budget crisis. But, there are some who persist in the partisan sniping that spoils the moment, that sounds good but is actually designed to jab with a gotta-ya. Partisanship that gets in the way of the problem solving that will be instrumental in solving the giant hole in the state's budget.

Such is the case with HB 1634 which would prohibit legislators from attending any fundraiser during a session of the General Assembly. Legislators are already prohibited from conducting their own campaign fundraisers during the session - I think this is okay, but it is bit naive to think a campaign donation made a day before or a day after the session is somehow less tainted. HB 1634 expands the ban to include attending other fundraisers such as political party or any other group that contributed to the candidate during the prior year - which could include organizations who do great work in our communities.

Here's where the partisanship kicks in - everyone knows this bill was intended to torpedo the Virginia Democrats traditional Jefferson-Jackson Day Dinner held each February and keep Democrats in the General Assembly away from their party's premier event. While supporters of the bill insist it is all about ethics and transparency (they doth protest too much), the partisanship is obvious to everyone.

Some concerns:

• At a time when bipartisan cooperation is most needed in our state and nation, the supporters of this bill are undermining good legislation that spirit in the legislature.
• There are clear First Amendment freedom of association issues in saying a legislator can't meet with someone or a group who gave him or her a campaign donation in the past.
• Virginia law places no dollar limits on contributions but this law would place an unreasonable time/place limit. Is it limiting freedom of speech?
• State law already mandates disclosure of a candidate's donations and expenditures - information which anyone can access at The Virginia Public Access Project and judge for themselves.

While the bill easily passed the House of Delegates, it faces a tougher ride in the Senate and, if it survives there, a likely veto by the Governor. All that will survive is the political posturing of its supporters during campaign '09. Another pox on bipartisanship.

Expanding democracy in Virginia

It is long past time for Virginia to end the unreasonable disenfranchisement of felons who have served their time. The Jim Crow era law is one of the most punitive in the nation making restoration of a convicted felon's voting rights extremely difficult. Only Virginia and Kentucky permanently take voting rights from every individual convicted of a felony. Currently, over 300,000 are disenfranchised under Virginia law. Two states, Vermont and Maine, never take away voting rights. Thirty eight states currently restore voting rights to former felons on completion of jail time and parole or probation. Eight others restore voting rights to most felons, excluding only those who are convicted of the most heinous crimes.

Early on the morning of January 19, a subcommittee of the House Privileges and Elections committee will consider several constitutional amendments to modify Virginia law on restoration of voting rights. Three resolutions - HJ 623 (Dance), HJ 664 (Morrissey), and HJ 677 (BaCote) would restore voting rights to all former felons. Two others - HJ 628 (Ware) and HJ 656 (Tyler) would restore rights only to those convicted of nonviolent felonies. More info on the bills can be found on Richmond Sunlight.

Making Virginia law more fair and more democratic is an ongoing process. It is time to end permanent disenfranchisement. Convicted felons who have served their time and been punished for their crime should be encouraged, rather than discouraged, to become participating members of their community. It is good for them, good for our communities, and good for democracy.

Learn more about the current Virginia law and how you can help make our commonwealth more democratic. You'll have to act fast to contact members of the Constitutional Subcommittee before their meeting on Monday. The members, linked to their contact info, are:

• William Janis (Chair)
• Lacey Putney
• Frank Hargrove
• John Cosgrove
• Jeff Frederick
• Clarence Phillips
• Kenneth Alexander
• Joseph Morrissey

Greed Is Good

In Wall Street, Michael Douglas electrifies viewers with his passionate defense of greed.

While self-interest drives all us, the past year has amply demonstrated how excessive greed, unregulated greed, immoral greed can bring down not only a nation's, but the entire global economy.

As the new Obama administration moves to replace blind laissez-faire with reasonable regulations of banking, securities, mortgages, Wall Street, etc., it is time for the Commonwealth of Virginia to attack those purveyors of greed still among us - the payday lenders, the car title lenders, and others who similarly prey on those who are desperate or poorly informed about prudent borrowing.

Last year the General Assembly "regulated" payday lenders with toothless legislation such as limiting loans to $500 and having one loan at a time. Already these predators are bypassing those ineffectual laws by offering open-ended loans that are virtually unregulated and can have interest rates of over 450%. Payday lenders also worked hard to water down truth-in-lending requirements - no sense in telling unsuspecting borrowers about the bottomless pit. 

I doubt the payday lending industry will bring an entire economy to its knees in the same way the self-indulgent fools in the mortgage industry did, but there can be no doubt that payday lenders have no moral barometer when it comes to wrecking an individual's personal economy.

Since the payday loan industry is obviously based on excessive and immoral greed, and it cannot and will not regulate itself, now is time for the General Assembly to act. A basic consumer protection demands the state put a 36% cap on interest that may be charged. That is the same rate cap the state has for other types of small loans. It is reasonable. It protects the vulnerable. It is good policy.

Who should the General Assembly protect? The greed merchants or the people?

Senator Emmett Hanger's Huntin' and Peckin'

Senator Emmett Hanger (R-Mount Solon) says he'll introduce legislation demanding Congress call a constitutional convention to consider a balanced budget amendment to the United States Constitution. Hanger believes the federal government needs to balance its budget or "... the economy will continue to deteriorate over time and we won't be the economic power we've historically been."

People can have various views about the wisdom of such an amendment. Many conservatives have long called for the federal government to balance the budget (bit of irony here as two of the biggest budget busters are darlings of conservatives: Ronald Reagan and George W. Bush). Some of these same folks also call for abolishing the Federal Reserve and returning to the gold standard. Others point to the need of the federal government to borrow in time of national emergency such as war (excuse me Adolph, can we take a few days off because we are out of money) or economic collapse (Obama's rescue plan). 

The truth is, Congress must have the flexibility in times of crisis, but Congress must also have the discipline to not spend like a drunken sailor (apologies to sailors). Recent attempts to bring that discipline resulted in the Graham-Rudman-Hollings Balanced Budget Act in 1985. When parts of that law were found unconstitutional, Congress pass the Budget Enforcement Act in 1990 which expired in 2002. Budgets were actually balanced in the late 1990s under President Clinton and a Republican controlled Congress.

All of this is complicated by entitlement programs like Social Security and by the politics of legislation where earmarks and pork barrel spending. To get a handle on wasteful spending, many have urged that the President have the power of line-item veto. The Republican controlled Congress gave this power, by simple legislation, to President Clinton. The Supreme Court held it was an unconstitutional violation of separation of powers and the line-item veto could only be granted by constitutional amendment.

So, would a balanced budget amendment be a good thing? Guess it depends! I am glad that Congress has the ability to respond with fiscal policy to our current deepening recession. But, it would would have been nice if Congress had said to President Bush, "Gee George, we just don't have a few extra trillions for your illegal war." Any proposed amendment would likely contain an ability of Congress to override its commands with a supermajority of 3/5s or 2/3s.

Is the idea of calling a constitutional convention a good one? We've never had a constitutional convention to propose amendments, so there are numerous unanswered questions. Article V of the Constitution says: "Congress... on the application of the legislatures of two thirds of the several states, shall call a convention for proposing amendments ..."

Some (there are many more) of these questions are:

• How timely does the "application of the legislatures" need to be? Does Congress have to respect such an application made two years ago? Twenty years ago? Or must the applications be within a term of Congress?
• Can a state legislature rescind an application?
• If (huge if) Congress did call a constitutional convention how would states be represented? Equally as in the Constitutional Convention that wrote the original document or by population similar to the House of Representatives?
• How would delegates to the convention be chosen? Appointed by the state legislature and/or governor or elected by the people of the state?
• Could Congress limit the scope of the convention to a balanced budget amendment or would the convention exercise its own authority and propose amendments on topics such as prayer in school or abortion? Could it rewrite the whole Constitution? If we look at record the Constitutional Convention in 1787, the convention would only be limited by what it thinks could potentially be ratified.

Although this method has never been used to propose a constitutional amendment, it may be used as political muscle to force Congress to act by either proposing an amendment itself (2/3s vote in each house), by passing legislation (like Graham-Rudman-Hollings), or by finding the political will to act more responsibly (at least until the current outrage passes).

Remember that proposing an amendment is the first step, as amendments must be ratified by 3/4s (currently 38) of the state legislatures (usual method) or at conventions held in each state (21st Amendment). Congress (or the national convention?) selects the method of ratification.

So, what is Senator Hanger's motive in introducing this "application" and pushing the idea. He has to know the odds of there actually being a constitutional convention are extremely long. Perhaps he feels like this is one way to push Congress into acting. Perhaps he hopes to generate public outrage about federal deficits and the growing federal debt.

Or perhaps all this is much closer to home. Senator Hanger remains an outcast within his own party, many of whom see him as too moderate. Some even call him gasp a liberal. Perhaps all of this is mostly about repairing the Senator's reputation and image among the right wing Republicans who will control the fate of his renomination in 2011. Perhaps it is politics 101 - saving his own seat?

Counting Virginia's Corn

The media is filled with the stories about the projected deficits in Virginia's biennial budget. Facing shortfalls of about $3 billion over the two years, Governor Tim Kaine and the General Assembly will need sharp pencils to balance, as required by law, receipts and expenditures. Already hiring has been frozen, state employee raises have be delayed, and a variety of programs cut or delayed.

While we certainly can't blame today's budget woes on Virginia's two-year budgeting process, the current situation highlights the potential hazards of trying to write a budget with a long time horizon. After all, every family I know looks at their finances on a yearly basis. Businesses do so as well. That doesn't mean a family or business is failing to plan long term. It does mean they are balancing (hopefully) the books each year. In doing so they can plan to save or spend for bigger projects over time - that kitchen renovation has been put off until next year!

So, why does the Commonwealth use a biennial budget process? The practice dates back to the days when the General Assembly met every other year. During the 1970s the General Assembly began meeting every year but they kept the two-year budget cycle. So in a long session (even years) the Governor and General Assembly enacts a biennial budget. The next year, during a short session, the Governor and General Assembly amend the budget to reflect changes in projected revenues or expenditure needs during the past year. Huh? They are working on the two-year budget every year... is that right?

If this process seems clumsy and confusing to you, then join the crowd. Along with Delegate Albert Pollard (D-99), Delegate Chris Saxman (R-20) will introduce legislation to move Virginia to an annual budget. They cite greater accountability and transparency as key advantages of an annual budget. For example, when the biennial budget promises state employees a 4% raise it gets spread in some fashion over the two years - it could be 2% in each year or 1/2% in the first and 3 1/2% in the second. Geez, I'd like the 3 1/2% in the first year - with compounding getting the money sooner rather than later would be lots better for me. Perhaps legislators have incentives to give raises based on something else - like their election cycle?

Pollard and Saxman also point to real-time numbers that are now available to budget writers. In the "old days," information on tax receipts and expenditures were often months behind so perhaps a two-year cycle made since. It isn't a valid reason today. Pollard has these and other reasons for changing to an annual budget detailed on his website.

One other reason for changing Virginia's budgeting process may be found in the cycle of electing the Governor. Virginia Governors cannot serve consecutive terms. With the current biennial budget, a Governor enters office with at least one strike against him or her.

To illustrate, Governor Kaine took office in January 2006, too late to propose his own budget. So the new Governor was mostly locked into the budget proposed by his predecessor, in this case, Mark Warner. Warner and Kaine are both Democrats and were probably on the same page on many budget issues. Kaine could offer changes, but the point is that he was to a great extent locked in to the two-year budget (he could also offer amendments at the short session) presented by the previous guy. The next budget cycle the Governor has the luxury of proposing, helping to enact, and carrying out "his" budget. Of course, in late 2009 Governor Kaine will propose a two-year budget that will be enacted after he is out of office and will be carried out by his successor. So, changing to an annual budget may shift power to the Governor - a good thing?

Putting Virginia on an annual budget seems like a good idea to this bird. It is common sense and easier to understand for most citizens. It is more transparent. It is more accountable. It may allow a Governor to better match governing priorities with campaign promises. But don't believe for a minute that it will eliminate all the smoke and mirrors that are typically part of the state budget - like saying they funded a 4% raise for teachers but started it in December (when teachers' contracts start in August) or failing to provide funding for the actual number of teachers employed. Guess that falsely claiming credit or saying one thing while doing another is just part of politics!