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Virginia News
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Virginia Ranks Near Bottom In Spending For Services
By Bill Sizemore
The Virginian-Pilot
© Sunday, December 22, 2002
Already a low-spending state for environmental cleanup, schools, parks, and aid for the elderly, Virginia risks slipping even more dramatically as lawmakers slash programs to offset budget deficits.
The result, some state leaders say, is that Virginia more resembles historically poor states and is losing ground to growth-oriented neighbors such as North Carolina.
Gov. Mark R. Warner
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"We need to start the kind of debate we haven't had in years in Virginia," Gov. Mark R. Warner exclaimed when addressing a gathering of local elected officials last month. "That's the debate about what we really expect from government."
By the end of the legislative session that convenes Jan. 8, Democrat Warner and the Republican-controlled General Assembly will have sliced nearly $6 billion out of the state's $51 billion two-year budget to bring it into balance as required by the state Constitution.
Virginia is among 31 states reporting budget shortfalls. Of those, 23 have responded by raising taxes. But so far, Virginia's budget-balancing has been done only on the spending side of the ledger.
In November, voters decisively rejected referendums to raise the sales tax for road-building in Hampton Roads and Northern Virginia, fueling the anti-tax mood in Richmond. Since then there has been almost no talk of raising taxes, which is in keeping with Virginia's history and standing among the 50 states.
Virginia is a wealthy state; it had the sixth-highest per capita income in the nation in 1999. But it ranks at or near the bottom when compared with other states in a variety of spending categories. In K-12 education, welfare and natural resources, it's in the bottom five. Only in police and prisons is Virginia a big spender. It ranks No. 3.
"You name the program, and in Virginia we underfund it," said Del. James H. Dillard II, a Fairfax Republican and one of a handful of lawmakers proposing a tax increase. He says fellow legislators tell him a tax increase is premature because "people haven't felt enough pain yet."
One Big Expense: Car Tax Relief
One of the biggest expenditures in Virginia's budget goes not for any government service but for tax relief.
Republican Gov. Jim Gilmore's signature program to phase out the car tax in the late 1990s targeted a local tax, not a state tax. That meant state tax money had to be diverted to cities and counties to make up for the local revenue that would have otherwise been lost.
Car-tax relief was an $855 million budget item last year -- the fifth-largest state spending program, bigger than the Department of Corrections. It accounted for the largest share of state spending growth from 1997 to 2001.
The current budget crisis has halted the car-tax phaseout at 70 percent. If it is ever fully implemented, it will cost the state an estimated $1.2 billion a year.
Shortchanged Schools
The biggest chunk of the state budget -- nearly one-third of it -- goes for education.
Warner and key legislators have promised to spare basic state aid to elementary and secondary education from the budget ax. In fact, in the budget he presented to the assembly finance committees Friday, Warner proposed increasing school funding by $65 million.
But by several measures, that will still leave Virginia's schools substantially underfunded.
The state requires its locally operated public schools to meet prescribed Standards of Quality -- minimum requirements for teacher-pupil ratios, special education, staff development and the like -- but it doesn't fully foot the bill for them. A study in February by the Joint Legislative Audit and Review Commission, a state watchdog agency, found that the state was $1 billion short of fully funding the standards over the next two years.
Virginia schools have infrastructure needs, too. The JLARC study found that about half of the state's school buildings are more than 30 years old and will need to be replaced or renovated in coming years.
In the state's faster-growing localities, more and more students are attending class in trailers. Chesapeake alone has 235 portable classrooms.
Virginia teacher salaries continue to lag behind the national average, prompting a brain drain from the state. The estimated average salary in Virginia was $40,247 in 2001; the U.S. average was $43,335.
"Why would anybody come to Virginia when they can make $6,000 more in Maryland?" said Rob Jones, director of government relations for the Virginia Education Association, the state teachers' union. "My concern is that in the long run, we'll get the teachers that Maryland and North Carolina and Georgia don't want."
For the third straight year, a record number of Portsmouth teachers -- 196, more than 16 percent -- fled the city school system.
"Portsmouth would be much better off if it was in a different state," Jones said.
College Tuitions Soaring
An infusion of new money in the last half of the 1990s had raised the state's rank for funding higher education from 43rd to 27th. But dramatic cuts this year have sent the state hurtling back toward the bottom, leaving the colleges and universities short an estimated $385 million a year.
State funding for the University of Virginia, the state's flagship institution, has been slashed 31.8 percent. U.Va. President John Casteen, noting that the university's state appropriation has plummeted to 9 percent of its total budget, has raised the question of whether it can even be fairly described as a state institution anymore.
The College of William and Mary has eliminated 46 courses and course sections, which will mean larger classes at an institution that has long prided itself on a small, intimate classroom experience.
Some of the most draconian cuts have come at Christopher Newport University, which is eliminating three degree programs: nursing, education and leisure studies.
To avoid deeper cutbacks, state colleges and universities are enacting hefty increases in tuition. The result will be to shift still more of the cost of education from the taxpayers to students and their parents.
Even before this year's budget crisis, North Carolina's per-student state support for higher education was 50 percent higher than Virginia's. In-state tuition and fees at U.Va. now total $4,984 a year -- 29 percent higher than the $3,856 paid by students at the University of North Carolina at Chapel Hill.
Elderly, Vulnerable At Risk
About one-eighth of total state spending is for Medicaid, the federal-state program providing medical services to low-income people.
Each state designs its own Medicaid program, so there are wide variations in the number of people covered and the scope of benefits. Virginia's per capita expenditure was 48th in the nation last year.
A large share of Medicaid money goes to nursing-home care for older indigent Virginians. About two-thirds of Virginia nursing-home residents now depend on it.
A 2000 JLARC study found that more than half of Virginia nursing homes were out of compliance with federal standards for quality of care.
Medicaid is also the primary funding source for serving low-income Virginians with mental retardation. There are nearly 2,000 on waiting lists.
Warner's proposed budget freezes Medicaid reimbursements to hospitals, nursing homes and HMOs at current levels.
Pollution Unchecked
What does being 50th in natural-resource spending mean for the protection of Virginia's environment?
Tayloe Murphy, the state's secretary of natural resources, ticks off a litany of programs he is responsible for administering: the Water Quality Improvement Fund, the Virginia Land Conservation Fund, the Brownfields Redevelopment Fund, the Open Space Land Conservation Act easement program, the Chesapeake Bay Local Assistance Department grant program.
There's no money in any of them, he says.
Nearly half the streams in the state don't meet federal water quality standards. More than 53,000 acres of once-productive shellfish beds in the James River watershed are now closed because of pollution.
During periods of heavy rain, the sewer systems in Richmond and Lynchburg overflow with raw wastes that dump into the James River. Federal grants are available to fix these problems, but a state match is required.
Warner's proposed budget further reduces state support for a variety of pollution control programs.
Last month, voters approved a $119 million bond issue to upgrade and expand state parks and nature preserves. But that's only a quarter of the $459 million in "critical environmental needs" identified two years ago by a blue ribbon commission. Virginia's last-place ranking is unlikely to be affected.
Reach Bill Sizemore at 446-2276 or size@pilotonline.com
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