Gov. James S. Gilmore III (R) delivered a two-year, $48 billion budget to the General Assembly today that makes another massive payment on the deepest tax cut in state history and sends more money to Northern Virginia to nurture its technology industries and begin addressing traffic congestion.
Savoring the strongest economy of recent times, Gilmore, like his counterparts in Maryland and other states, crafted a spending plan that covers basic government services while also sprinkling such benefits as investment programs and tourist attractions on virtually every corner of the Old Dominion.
This morning, Gilmore crossed Capitol Square to address members of the legislature's money committees who are anxious to convene in four weeks so they can begin rewriting the defining budget of a chief executive who by law may not succeed himself after leaving office in 2002.
"Governor, welcome--we await the good news," said Del. Vincent F. Callahan Jr. (R-Fairfax), the Appropriations Committee chairman who presided over the governor's briefing.
Gilmore listed as his top priority the promised phaseout of Virginia's car tax, a program that returned $111 million to residents last year and more than $200 million this year.
That election-year pledge by Gilmore is getting more expensive, the governor and his budget team said today. Car tax relief, coupled with reductions in 15 other taxes, would force government to make up $1.6 billion a year in lost revenue. Nearing the full phaseout two years from now would cost an additional $878 million, aides said.
"There's a tremendous growth in revenue that is occurring, and as a result it's perfectly clear that we can make taxpayers a priority along with other priorities," Gilmore told reporters. "We don't have to put taxpayers last."
In Maryland, Gov. Parris N. Glendening (D) plans to take advantage of the economic good times by boosting spending on education and health programs, but he has resisted calls to accelerate the state's planned income tax cut. Glendening has said he favors abolishing a state inheritance tax.
Many Virginia legislators remain anxious about stress on future budgets if state government remains obligated to major tax relief in an economy that could flatten or even decline sharply over time.
"We're going to deal with 3 percent [economic] growth or 2 percent growth," said Del. John H. "Jack" Rust Jr. (R-Fairfax), a budget expert. "It may not happen next year, but it's going to happen."
Added Del. James H. Dillard II, another GOP moderate from Fairfax: "It's pretty hard to argue not to give the money back, but we have to be careful we don't give the store away."
In addition to traditional government programs such as health care, public works, education and environmental protection, Gilmore wants to send millions of dollars into initiatives that he said befit "Virginia's first completely 21st century budget."
For instance, with Capital Beltway area traffic in mind, Gilmore proposed $10 million in tax credits for companies that buy personal computing equipment for workers who stay at home, avoiding rush-hour roads.
Overall, Gilmore budgeted $55 million for high-technology programs, which he hopes will be a major part of his legacy in Northern Virginia and beyond.
"The governor's initiatives are right on," said J. Douglas Koelemay, an executive of the Northern Virginia Technology Council, who heard the governor's presentation. "The payoffs are very high, with the kind of high-wage jobs that are a big part of this economy."
However, Koelemay and other spokesmen for the region said they wanted to hear more about transportation solutions from Gilmore, who today repeated the spending proposals he made last summer.
The August plan "was a solid step forward," Koelemay said, "but there's more to be done there."
Gilmore proposed using proceeds from the national tobacco settlement, accelerated federal money and a new "Priority Transportation Fund" to pay for new projects.
Del. Linda T. "Toddy" Puller (Fairfax), a newly elected Democratic state senator and a persistent Gilmore critic, said he ignored her region's worsening traffic congestion today. "His plan--$2.5 billion over six years--is less than a drop in the bucket," Puller said.
Still, with the economy humming, most lawmakers were left to pick at the fine print of Gilmore's budget. For instance, Dillard, a veteran educator, complained there was no money to keep the state on track with teacher pay raises. State Sen. Richard L. Saslaw (D-Fairfax) said there should have been even more money to expand Virginia's 17 public universities to the widest possible pool of applicants.
And John H. Chichester (R-Stafford), the Senate Finance Committee chairman, said Gilmore's budget assumptions contained "a silent killer," an array of tax credits granted by earlier legislatures that would sap government revenues over time.
"There's no room for long-term planning, and that worries me," Chichester said.
Yet Gilmore, just back from a week-long technology summit in California, painted a vivid picture of a dynamic Old Dominion, flush with enough money to pay for essentials, and more.
"Our economy and our society no longer embody the traditional notions of a sleepy southern state," Gilmore told legislators. "The financial freedom of Virginia's working men and women and business [is] included in the array of values reflected in my budget."
Del. Robert H. Brink (D-Arlington) summed up the view of many assembly members marveling at Gilmore's fortune.
While noting that "he's made some very good steps," Brink said, "this is the luckiest governor in the world to have this kind of economy."