Economic Reality Trips Up Va. Republicans

Friday, October 16, 2009

IN VIRGINIA'S statewide and legislative elections this fall, a key Republican talking point is that spending in the commonwealth has outstripped population growth and inflation. In fact, the suggestion that Richmond is on a check-writing binge flies in the face of this reality: Over the past decade, Virginia's spending has actually risen somewhat more slowly than the national average.

Take a look at the numbers. Excluding federal outlays, the expenditure of state funds in Virginia grew at an average annual rate of 4.6 percent in the decade starting in 1999, according to figures from the National Association of State Budget Officers. (Spending actually spiked in the dot-com boom year just before that, by 15.3 percent, in the midst of eight years of Republican governorships in Richmond.) During that same decade, the average annual increase in outlays of state funds nationally was 4.8 percent. In other words, over the past decade spending by states nationally increased at a rate about 5 percent faster than Virginia's spending. Even in highly conservative states such as Texas and Utah, the growth in spending was roughly commensurate with Virginia's.

The fact that state spending has outstripped the rate of inflation and population growth does not mean state government has grown in recent years; generally speaking, it hasn't. Rather, it reflects the rising costs of building materials, health care, pensions and other big-ticket items that figure prominently in state budgets.

Nor is there anything to the Republican attacks on the incumbent administration of Gov. Timothy M. Kaine (D) for having overstated revenue projections for the past two years -- in other words, as the recession gripped the nation. Last time we checked, the economic downturn was a 50-state phenomenon. Virtually every state has been forced repeatedly to revise downward its estimates of the tax revenue it will collect. As a line of attack on Mr. Kaine and Jody Wagner, his former secretary of finance and the Democratic candidate for lieutenant governor, this one is particularly far-fetched.

In fact, the Republican rhetoric points to a real dilemma for its own candidates: how to reconcile the fact that Virginia is regularly ranked among the best-managed states, the best states in which to raise a family and the best states in which to do business with the fact that it has been run by Democratic governors for the past eight years. While it is true that Virginians face a somewhat heavier tax burden relative to other states than they did a decade or two ago, it is equally true that those higher taxes reflect the fact that the state has become much more heavily urban than it was (witness: Northern Virginia). Since the GOP base remains in rural and exurban parts of the state, those higher taxes, and that increasing urbanization, may be a bitter pill to swallow for some Republican candidates. Nonetheless, those are trends that represent Virginia's reality today, and tomorrow.

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