State Tax Revenues Climb Yet Again
Saturday, October 15, 2005 :::
Virginia is still raking it in:
State tax collections in September jumped 11.2 percent over the same month a year earlier.
For the first quarter of the fiscal year, which began July 1, the growth in tax revenue was 14.5 percent above the same three-month period a year ago.
The strong surge in the state's economy suggests that Gov. Mark R. Warner could have an extra $3 billion to $4 billion - or even more - to spend when he submits his final two-year budget in mid-December.
And with the additional scratch, come even more call for greater spending:
"I'm getting requests for extra spending from everybody, even from some who never have asked for more funds," Warner said recently.
The Democratic governor, who had to deal with a $6 billion shortfall in expected revenues during his early years in office, now can use his final budget, which begins July 1, 2006, for some legacy issues in education, public safety and health care.
I like that term -- "legacy issues." It sounds so...noble. But, as some in the Senate say, there is no surplus. There are "bills in the drawer," "unmet needs," demands and "investments" that can neither be ignored nor deferred. And quite honestly, if the state does end up running a multi-billion dollar surplus this fiscal year, then the calls for higher taxes (such as those proposed by Sen. Potts and, I can only guess, by Sen. Chichester and Lt. Gov. Kaine in their "secret" transportation plan) ring hollow. The money is there right now. But so, too, is the demand for even more.
Since it is futile in the current environment to renew my call for a rebate on excess funds to taxpayers, I suggest another option: use it to pay down Virginia's debt -- especially high interest debt. It's not sexy. It's not fun. But it would serve to reduce yearly interest payments on bonds and free-up monies for other purposes.
Maybe even tax relief.
::: posted by Norman Leahy at 10/15/2005