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Tuesday, June 3, 2008

Here's the REAL Warner record (Where did the $9 billion go?)

You've heard the story, dear reader: Mark Warner inherits a massive budget deficit, waves a magic wand, turns the mean Republicans into good RINOs with some pixie dust, delivers the glass slipper of tax "reform," and everyone lives happily ever after.

Why did I end it like that? Because it's a fairy tale - or, if you prefer 30 Seconds to Mars (good band, BTW), it's a beautiful liiiiiiiiiiiiiiiiiiiie.

The real Warner record, i.e., the one he actually compiled while here on Earth, is a little different.

Let's start with his first budget (2002-04), the one in which Warner supposedly reduced spending drastically. In fact, overall state spending rose more than 10% from the previous biennium (almost $5 billion). It is true that General Fund spending stayed roughly even, which is where Warner derived his reputation as a budget cutter. However, even here, there was more than met the eye.

One has to remember the context of the FY2002-04 budget; it did not happen in a vacuum. While Warner was wringing his hands over his supposed budget discipline he was also pushing for two referenda (one in Northern Virginia, the other in Hampton Roads) in which the voters of those regions would impose a sales tax increase on themselves that would generate roughly $625 million a year (Free Lance Star). With that money plowed into the budget, the General Fund would have risen 5% (and overall spending nearly 13%). As for the regular transportation budget, it was whacked by nearly $3 billion (FLS) - just as the referenda worked their way through the legislature (what a coincidence!). Warner put nearly all of his political capital into the referenda (in fact, he made them the centerpiece of his campaign for Governor in 2001), and most of the Richmond elite joined him. The voters, however were unimpressed, and the tax increases went down to landslide defeats.

Warner's bait-and-switch scheme had failed miserably, but on the plus side, there was still the bare-bones (and no roads) budget, that Warner could claim was part of a deliberate fiscal prudence all along (Bush the Younger made a similar move when the state legislature separated his 1997 tax shift plan and killed the tax hikes in it - Bush used the resulting tax cut to build his tax-cutting credentials). Moreover, since the tax increase would have only been limited to NoVa and HR, the rest of the state didn't notice Warner's little scheme, and took the lean budget at face value.

In other words, Mark Warner owes his reputation as a "fiscal conservative" to angry urban and suburban voters who rejected his signature - and in fact his only - campaign proposal.

Undaunted, Warner plowed on, this time with the nonsense of "tax reform" - which of course meant a tax increase. Warner wasn't a fool, he knew that a real Republican legislature would never have let him get away with it. However, he also knew that the GOP Senate majority had more than enough RINOs to get through whatever he wanted. Still, it was politically risky, until John Chichester gave him a gift.

Chichester shot for the moon and demanded a $3 billion tax increase, a mammoth amount that obliterated the GOP reputation as the low-tax party (already damaged by the party's support for the 2002 referenda). Warner then offered the coup de grace by calling for a tax increase roughly half that. As a result, he placed himself between the Republicans in the House and the RINOs in the Senate, and made himself look like the referee in a GOP civil war.

Of course, Warner insisted the tax hike was necessary to put the state on sound fiscal footing. What he didn't tell anyone was that his budget for 2004-06 was more than $10 billion higher than the previous one, an increase of almost 17%. More than $4 billion of that was in General Fund spending - meaning Warner could have balanced the budget and increased General Fund Spending by roughly than two-and-a-half billion dollars without any tax increase.

Bet you haven't heard that piece of info from the Warner people, have you?

The fact is, Mark Warner could have kept spending growth at the oh-so-miserly level of roughly $9 billion if he hadn't raised taxes, but he wanted $10.5 billion, so Virginians be damned.

Ever since Gilmore announced his Senate candidacy, the Democrats have been screaming about his "$6 billion" shortfall. My blogmates here have already turned that into swiss cheese (STD, JAB).

I, however, would like to as Mark Warner my own question.

Where did the $9 billion go?

Cross-posted to the right-wing liberal

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