Virginia, the state where the politicians are proud to talk about how fiscally responsible they are, has debt problem. Over the last several years, legislators have whipped-out the state credit card and put us all into hock for any number of items — new schools, an additional to the Virginia Museum, some road work. The bills have piled up to such a degree that debt service payments will top nearly $600 million by 2012. So how do we fix this growing problem? According to Senate Democrats, we need to raise the state’s debt limit.
In an interview last weekend with Republican Sen. Mark Obenshain told my colleague Scott Lee that Democratic staffers on the Senate Finance Committee — of which Obenshain is a member — raised the idea of increasing the debt ceiling from five percent of general fund revenues to seven percent. The rise was cast as a “thought experiment” more than as a hard and fast proposal. Obenshain said that most members were “less than enthusiastic” about the idea, but that those who control the Finance Committee — mainly senior Democratic Senators from Northern Virginia, weren’t necessarily opposed to it.
Obenshain said the whole idea should an incredible “tone deafness,” considering how voters in the November elections had voiced strong concerns about government spending and indebtedness.
Indeed it does. But could it still happen? Yes, if Virginia Finance Secretary Rick Brown is correct when he says that the debt advisory commission will likely recommend raising the limit –marginally — in mid-December.
But alongside what could be a brewing battle over Virginia’s credit card is the budget. The McDonnell administration cut billions from the budget during the last legislative session and proudly noted that after all the cutting, and a bit of revenue growth, the state was more than $400 million in the black. But According to Sen. Obenshain, early projections are that a $140 million shortfall is likely next year…meaning yet another session of more cuts and more wrangling over where those cuts should fall.
And that’s a problem – if you’re a member of the General Assembly who’s tired of playing the Grinch when you really prefer to play Santa. More cuts mean no opportunities to hand out favors from the state’s shrinking general fund. Even worse, it means having to forgo such gift-giving in advance of the 2011 elections.
Given that hardship, is it any wonder some of them are open to the idea of raising the debt limit?
