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McDonnell and Deeds mostly mum on how to fund their ideas

By Rosalind S. Helderman
Monday, November 2, 2009

As Republican Robert F. McDonnell and Democrat R. Creigh Deeds make their final pushes for votes before Tuesday's election for governor in Virginia, both candidates are campaigning largely on their ideas for spending, not budget cuts.

But no matter the contest's outcome, there's little chance the winner will be able to launch expanded spending anytime soon as Virginia continues to cope with a severe budget crisis that has already led to unpopular measures.

Deeds spent Sunday campaigning across the Hampton Roads area with Gov. Timothy M. Kaine (D) and members of Congress. McDonnell stumped in Tazewell County, Weyers Cave, Winchester and Leesburg. Both have promised to raise teacher salaries, expand access to higher education, build roads and embark on a number of other costly initiatives if elected.

"The reality of it is that neither one of them has campaigned on the real story," said James J. Regimbal Jr., a former staff member of the state Senate Finance Committee and an economic consultant in Richmond. "For the governor of the state, the real story is we have this train wreck coming."

Like many states, Virginia has used rainy-day funds and federal stimulus dollars to ease the pain of dropping tax revenue. But reserves are depleted, and stimulus dollars will soon run out. That means that the two-year spending plan Kaine will submit next month will probably include deep cuts that could touch every aspect of government and possibly result in fired teachers, frozen health services and crowded jails and prisons.

Pushed on the campaign trail to detail how they would deal with that continuing crisis and pay for their proposals, McDonnell and Deeds have each insisted they will be able to trim government waste, reinvent aspects of state government and make their campaign promises budgeting priorities.

"It takes leadership to get it done," McDonnell said when asked at a debate two weeks ago how either candidate could realistically afford his ideas. "I think we need to have government run a little bit more like business, with private-sector initiatives, more innovation, more consolidation."

The Republican points to cuts he made to his office budget while attorney general as proof he knows how to make it happen. He has also proposed funding for some of his ideas, such as ensuring that 65 percent of state education dollars are spent in the classroom, a proposal he says would result in a shift of $480 million out of administrative costs.

But it's unclear whether his goal would result in real new spending in the classroom: McDonnell's figure comes from federal definitions for what makes up classroom spending, but differing state standards show that 64.8 percent of funds are already being spent there.

Asked at the same debate about a proposal to award new college degrees, Deeds said: "How can I afford to pay for it? We create efficiencies in government. We do performance reviews of every agency of state government. Through zero-based budgeting, we create efficiencies and move new dollars into higher education."

Deeds has said he thinks the state can save $500 million over two years by conducting performance reviews and trim $300 million from local school systems by helping them do the same. He comes to the figures by looking at the experience of other states, such as Texas, that have saved millions through such reviews.

The claim, however, is somewhat difficult to square with Deeds's frequent praise for past Democratic governors Mark R. Warner and Kaine, under whom the state has been awarded national prizes for management in part because of efforts to trim waste.

Both candidates have advocated awarding thousands of new college degrees a year at a time when higher education funding has been cut: Deeds has called for 70,000 over 10 years; McDonnell, for 100,000 over 15.

Both have said they favor raising teacher pay to the national average, a $440 million-a-year proposition.

Both have proposed tax credits that could siphon more money out of the treasury.

And Deeds and McDonnell have together criticized some of the steps Kaine has taken to deal with the crisis, including saving $9 million with an unpopular decision to close 18 highway rest stops. If elected, both men have promised to reopen the stops.

McDonnell has more aggressively hammered Deeds on the issue of spending, with Republicans publishing a list of 33 new spending items in Deeds's policy package. Deeds's plans include more suggestions to expand Virginia's general fund spending, proposals that include expanding health services for low-income children and pregnant women and launching a scholarship program that pays half the public college tuition of students who pledge two years to public service.

Deeds has said he could pay for the proposals because he has promised not to divert funding from those areas to transportation. He has said the state's road and transit needs have grown so large that they require new sources of revenue, including possibly from increased taxes.

McDonnell has said his transportation package would provide money for roads without raising taxes in part by steering state dollars now spent on other priorities to transportation. But doing so would require additional cuts to make up for those dollars. Selling state-run liquor stores, for instance, would give the state a one-time infusion of cash for roads but eliminate an estimated $100 million from the state's yearly budget.

McDonnell contends that keeping taxes low is the key way to sparking the kind of economic growth that would improve tax collections and refill state coffers.

"Both sides speak of how they're going to do things without showing how you'll get there," said former governor L. Douglas Wilder, who has cited spending as a reason he has endorsed neither candidate, a rebuke more stinging to fellow Democrat Deeds. "Heaven knows how deep we'll continue to go in Virginia, the depths that will be reached. . . . No candidate, Republican or Democrat, should base anything on new funding."

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