Proving that anyone can be an economist, the cheery finance professor from the University of North Carolina reassured General Assembly leaders that Virginia was at the forefront of a national recovery from a year-long recession.
All the signs say so, according to James F. Smith of Chapel Hill: record levels of personal income, comparatively low unemployment, a robust housing market and a promising holiday shopping season.
"Something has turned around in Virginia," Smith told many of the legislature's best financial minds at a budget retreat in Danville last week.
Richard L. Saslaw of Fairfax County, the Senate Democratic leader and a longtime member of the Finance Committee, which was hosting the retreat, was incredulous at Smith's rosy scenario.
"While the numbers seem to be improving, they don't seem to be improving in our world -- in Virginia," Saslaw said.
Saslaw's particular corner of the Old Dominion, once the envy of downstaters who lusted after its phenomenal wealth, is now Virginia's goat. Northern Virginia's dot-com bubble burst and helped drive up the miserable numbers Saslaw was talking about: layoffs, office vacancies, fewer corporate taxes being paid into the state treasury. As the Washington suburbs go, so goes all of Virginia.
At the budget retreat, even the majority Republicans who were giddy about Smith's prognosis took it with, oh, about eight pounds of salt. State Sen. Charles R. Hawkins (R-Pittsylvania) told Smith he felt like he had stepped through Alice's magic mirror and into an improbable Wonderland where Virginia's $1 billion budget shortfall was no more.
Hawkins, Saslaw and most of the rest of the Senate -- along with incoming House of Delegates speaker William J. Howell (R-Stafford), Lt. Gov. Timothy M. Kaine (D) and a bevy of county government lobbyists whose clients are about to get skewered in the budget process -- retreated to Danville to bone up on the fiscal issues that will dominate the 2003 General Assembly session.
"We need to think about where we want to be on the other side of this dilemma," said Senate Finance Committee Chairman John H. Chichester (R-Stafford). "I recognize that it is very, very difficult to look ahead when we are in the midst of a storm, but I think it's vitally important that we do so in the months ahead."
After 24 years in the state Senate, the last few as one of the assembly's most powerful figures, Chichester is a big believer in long-range thinking about the problems that beset Virginia -- and how to pay for them. During the 2001 session, he single-handedly brought the budget process to a grinding halt by insisting that the current level of car-tax relief was too expensive to bear in the coming recession. Time has proven him largely right on that.
Despite Chichester's prodding, legislatures rarely plan for a rainy day. They are chronic victims of economic cycles, spending freely in good times and retrenching in bad or even middling times such as these. They never learn a lesson from one boom to the next bust.
Chichester tartly pointed that out to his colleagues.
"The thing that gnaws on me the most is our apparent inability or unwillingness to be top-notch in any of our core responsibilities," he said. "If grades were being passed out for adequacy of funding true core obligations, I'd feel lucky if we got a B-minus."
Most of the lawmakers sitting around the conference table in Danville had been in on the ground floor of the decisions that helped Virginia get in its current pickle. It is highly unlikely that Virginia's structural budget problems will be permanently repaired in 2003, when all 140 legislative seats will be up for election.
The assembly's GOP majority punted on what could have been a landmark restructuring of the state's antiquated tax code, and that was before the defeat of the sales tax proposals in Northern Virginia and Hampton Roads made lawmakers even more risk-averse about finding bold budget solutions. The lopsided defeats in the state's two most populous areas reminded elected officials just how out of touch they are with their constituents.
In that climate, and with Gov. Mark R. Warner (D) struggling to stay relevant in the decision-making process, the 2003 session is already shaping up as a Band-Aid legislature of no new taxes and makeshift cuts and patches to carry everybody through the fall election.
Warner will be able to frame some of the debate when he delivers his budget Dec. 20, but he has shown no inclination to offer truly creative ideas for closing the shortfall. Rather than showing his hand with a few innovative proposals for budget reform, Warner seems most interested in avoiding what he called the "typically, partisan political bickering" between the executive and legislative branches.
Making nice with lawmakers triumphs over forcing a genuine debate on Virginia's $25 billion annual budget.
Warner knows the second his budget lands on the assembly's doorstep, it becomes the exclusive property of the Republicans who control the budget process.
What grade will Chichester give it this year?
B-minus won't cut it.