Thursday, March 3, 2011

Not a bad year, all things considered

The 2011 regular session of the Virginia General Assembly is in the books.

Compared to recent years, I'd say the legislature did pretty well.

Sure, they took an extra day to get the budget worked out, but that happens more often than not these days. And it's not really partisan gridlock that causes the problem, because the General Assembly had longer budget standoffs when Republicans controlled both the House and the Senate.

Of course one reason this session looks better is that state revenues exceeded forecasts, meaning not only that we didn't have to have another round of big budget cuts but that legislature was actually able to restore some cuts made last year, particularly in the area of public education. Things always run smoother in Richmond when there's more money to spread around.

The final budget seemed to be a pretty fair compromise between the positions of the Senate and the House.  The Senate managed to minimize the amount of the general fund money spent on transportation, an issue the Senate has been adamant about under both Republican and Democratic leadership. The House won on putting more money in the state's Rainy Day Fund.

The House also prevailed on one of the biggest issues of the session, state employees contributions to the Virginia Retirement System.

 Gov. Bob McDonnell had proposed that employees begin picking up a 5% contribution that had previously been paid by the state, in exchange for a 3% raise.

The Senate proposed to ignore McDonnell and continue the status quo. The House chose instead to go along with the 5% employee contribution but to couple it with a 5% raise to hold state employees harmless.

Actually, it doesn't hold them quite harmless. Due to higher taxes, state employees will still see a small decrease in their take home pay. It would have taken about a 5.2% salary increase to hold them totally harmless. But, in return for that small decrease in take home pay, state employees will see higher retirement benefits, which are figured on their highest three years of compensation.

That fact makes one wonder if  any progress has been made toward McDonnell's stated purpose in making the VRS changes - to address a shortfall in the pension fund. More money will go into the fund in the short term due to this year's change, but higher benefits will have to be paid out on the back end.

How does that affect what we're told is a $17 billion shortfall in VRS? Well, there are a couple of things to remember about that. What you seldom hear mentioned when the VRS shortfall is discussed is that it's a shortfall over the next 80 years, which is how far into the future VRS figures its liabilities.  The other thing to remember is that the shortfall was not caused by state employees not paying their share of the contribution. It was caused by past governors and legislatures deciding in tough economic times not to make the full payment required to keep the system fully funded -- as McDonnell and the General Assembly did last year by shorting the pension more than $600 million -- and by bad recent returns on VRS's investment portfolio.

While the investment returns will likely average out in the long run, the state's elected officials should probably stop looking at the pension fund as a piggy bank to raid when they need money. That's part of what sent Jimmy Hoffa to prison. We might consider a constitutional amendment that would require the correct payment is made. In years when we have extra funds, the General Assembly probably should consider paying back past shortfalls, with interest.

Gov. McDonnell personally had a good session.

And that's despite the fact that the legislature changed his VRS plan and dismissed his plan to privatize ABC stores out of hand.

The main reason was transportation. In getting the authority to issue more than $3 billion in bonds for road projects, McDonnell accomplished more for transportation than the previous four or five governors combined. Would that plan be even better if there was a gas tax hike to provide a permanent stream of new revenue for transportation? Sure. But that's not where Virginia's political culture is right now. The bonds are better than nothing. It's a good time to borrow because interest rates are low and a good time to build because bids on large construction projects are coming in lower than expected due to the recession. Although McDonnell wouldn't like the comparison to President Obama, the projects should also serve to stimulate the state's economy, keeping a still fragile recovery on track.

McDonnell's other signal achievements of the session were along the same lines. His economic development package sailed through the General Assembly, including a proposal to allow for the establishment of Tourism Enterprise Zones, which could be of use to the Historic Triangle. The Virginia Tourism Corporation also saw an increase in funding and in 2011 will return to out-of-state television advertising for the first time in five years. Virginia is not only open for business, it's once again open for lovers.

Despite the fact that 2011 is an election year, it wasn't a great year for partisan issues.

A proposal to call for a Constitutional Convention to consider a repeal admendment to the U.S. Constitution landed in the Senate round file, where it belonged.

A bill outlawing the synthetic marijuana product "Spice," which actually was a combination of more than half a dozen bills on the subject, easily passed. I suppose that's a good "tough on drugs" brochure bill for the campaign, although support for the legalization of real marijuana has been climbing for years.

A constitutional amendment to restrict state and local governments from using eminent domain for economic development purposes passed. It's largely redundant. The state passed a similar statute in the wake of the Supreme Court's Kelo decision. It probably doesn't hurt anything to put that in the Constitution, but it probably doesn't really change much either.

Finally, a bill that passed near the end of the session, to require abortion clinics to meet the same health standards as hospitals is probably not nearly the victory that pro-life groups proclaimed it to be or the defeat that pro-choice forces painted it.

The goal behind the bill was to reduce abortions by forcing clinics to close rather than to meet the greater expense of being brought up to hospital standards, a standard probably unnecessary for facilities performing first trimester abortions. It wasn't about the health of women going in for abortion, because many, perhaps most, pro-life legislators believe those women belong in prison.

However, it's unlikely to have the desired effect. While abortion providers and pro-choice groups bemoaned the bill's passage, it seems likely that they'll spend the extra money to upgrade.

Legislators will return to Richmond in April for what is likely to be a fairly placid veto session, with the exception of judicial elections, which always have the potential to become divisive.

Then they'll get down to the real business of 2011, redistricting the state's 11 congressional districts and 140 legislative districts. That's where we might see some fireworks.

Cross posted at All Politics Is Local.

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