McDonnell's funding for some nonprofits in Virginia budget doesn't sit well with everyone

By Rosalind S. Helderman and Anita Kumar
Washington Post Staff Writers
Monday, December 27, 2010; 6:06 PM

RICHMOND - Tucked into a multimillion-dollar package of recommended tweaks to Virginia's two-year budget is a suggestion by Gov. Robert F. McDonnell that the state steer dollars to some private nonprofit groups even as tax revenues remain sluggish.

When the General Assembly convenes next month, he has asked that lawmakers consider spending $1 million to promote OpSail 2012, a tourist event that will bring tall sailing ships to ports along the Eastern seaboard to commemorate the War of 1812.

McDonnell (R) also recommended a $500,000 grant to help fund a new headquarters for Operation Smile, a Hampton Roads-based charity that helps children with facial deformities, and another $500,000 for Virginia's food banks.

While the projects themselves may not be controversial, some Virginia spending hawks question whether the Republican governor is retreating from a promise to pare government to its core functions by using earmarks for private-sector groups.

McDonnell counters that the groups are doing good works - works that would be more expensive for government to perform - and creating jobs. The spending, however, illustrates the governor's difficulty in heading a conservative coalition in Richmond whose members are increasingly budget purists.

"These are smart, targeted investments of state dollars to groups and projects that help the commonwealth provide basic services, or help facilitate private-sector job creation and economic development," McDonnell spokesman Tucker Martin said. "The governor will not raise taxes. He is committed to using limited state dollars wisely to turn our economy around and help the people of Virginia."

No one has suggested that the groups McDonnell has favored are not worthy of taxpayer funding. But the items have raised consternation from some fiscal hard-liners who otherwise had been cheering McDonnell for a controversial proposal to eliminate state funding for public radio and television.

"We applauded the governor the other day for proposing cuts to public broadcasting, but it's important those cuts not be undermined by personal pet projects,'' said Ben Marchi, state director of Americans for Prosperity, which supports limited government. "[The state] shouldn't be increasing funding for any of these things during tough economic times."

Defining 'earmark'

While Republicans on Capitol Hill have pledged to stop earmarks - the process of inserting funding requests in legislation for hometown projects - some point to McDonnell as doing the opposite. But it's debatable whether his spending technically can be labeled earmarking because the moniker generally is given to pork advanced by lawmakers, not the executive branch.

Martin noted that, at times, federal earmarks are added quietly and with little scrutiny just before a bill is passed. In contrast, McDonnell has issued news releases about his priorities, and they will receive a full hearing.

But some fiscal conservatives urge scrutiny of the governor's proposals because he alone selected the programs from among many clamoring for assistance, and they would be funded outside of the state's routine spending formulas.

For instance, while the state will slash $77 million in funding for hospitals and doctors that serve Medicaid patients, McDonnell has recommended a $5 million grant for the Massey Cancer Center at Virginia Commonwealth University in Richmond, $1 million for the Children's Hospital of the King's Daughters in Norfolk and $5 million for Eastern Virginia Medical School in Norfolk.

Steve Ellis, vice president of Taxpayers for Common Sense, a Washington-based group that has criticized congressional earmarking, said people have gotten too wrapped up in the word "earmark" in recent years. But he said any projects chosen by the governor deserve heightened attention.

"If [U.S. Sen. James] Webb got $500,000 for renovating Operation Smile's headquarters, we would have it down as an earmark," Ellis said. "That deserves extra scrutiny."

Martin said McDonnell chose to give money to the food banks because they provide an essential need for Virginians in a cost-effective manner. He proposed sending money on Operation Smile and OpSail because of their impact on economic development; for example, the state estimates that OpSail will bring in $150 million to Virginia next year.

Like most governments, Virginia has long made donations to nonprofit groups that serve the public good or spark economic development. In flush times, legislators and the governor steered millions to their favorite groups and museums across the state.

But the practice had been largely halted in recent years as the state was forced to cut billions amid the deep economic recession.

And for some activists who have been politically energized by the need to curb what they call out-of-control government spending, shelving such grants has been a good thing.

McDonnell has faced similar gripes over economic development proposals to spend millions to lure private companies to Virginia and a transportation plan to borrow $2.9 billion to fix the state's clogged roads.

"It's a problem that Republicans and conservatives have across the board, at the state and federal level," said Quentin Kidd, a government professor at Christopher Newport University in Newport News. "They've complained bitterly about liberals being willing to spend. But when it comes down to it, it's not really about the spending - it's a question of spending priorities."

Help appreciated

Representatives of some organizations said they desperately need the state grants, even though the amount is less than they had requested.

Virginia gave $1 million to food banks in 2009 and 2010 in budgets originally written by then-Gov. Timothy M. Kaine (D) as the economic downturn led to a spike in unemployment.

Leslie Van Horn represents the state's seven food banks as executive director of the Federation of Virginia Food Banks. She said she asked for additional money this year but was told McDonnell, a strong supporter of the organization, would recommend only $500,000.

"It impacts the lives of all Virginians,'' Van Horn said. "We all have the right to have food on the table."

Operation Smile, which provides surgery, research and education, asked McDonnell for $3.5 million toward its $20 million headquarters scheduled to open in 2010 in Virginia Beach. McDonnell recommended $500,000.

Bill Magee, who opened Operation Smile in Norfolk in 1982 with his wife, Kathy, said he and McDonnell have met a few times over the years but do not know each other well. The organization was one of the largest users of Norfolk International Airport last year, employing 100 workers in Virginia and generating $5 million per year for the state economy.

"It will be tremendous, really,'' Magee said. "We realize that times are tough, and we we're glad they could do this."

With McDonnell's recommendations in hand, legislators now could file new requests for groups that they believe also deserve state help.

"It certainly will raise a question in the minds of some legislators of exactly how do we define those non-state agencies that would constitute an exception to the policy and receive funding in these economic times," said Sen. Thomas K. Norment Jr. (James City), the Senate's leading Republican.

It doesn't help that Virginia's state constitution specifically bars giving tax dollars to charitable organizations not controlled by the state. Legislators have gotten around the provision for years by designating nonprofits as "historical" or "cultural" agencies.

Democrats, meanwhile, have signaled that they will try to turn the tables in Richmond next year, charging that McDonnell is pursuing fiscally risky policies. It's not clear, however, if they will target his charitable gifts to otherwise popular groups.

"You probably won't find a lot of Democrats who don't want to fund these groups," Kidd said. "The question is if they can find the sweet spot - to hit him on the hypocrisy without hitting him on the substance of the issue."

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