 |
|
|
General Assembly Newsletter
March 3, 2010 |
|
|
|
|
|
This past week the Senate Committee on Finance reported out its version of the budget. The budget reported was the result of weeks of intense consideration. I can assure you that in Virginia the budget is closely scrutinized and debated again and again in order to provide our citizens with what we believe is the best possible scenario.
|
|
Unlike the U. S. Congress, here in the Virginia General Assembly we are required to pass a balanced budget. This fiscal discipline has served us very well, so much so that we continue to earn a coveted AAA bond rating year after year.
|
|
Unfortunately, the conditions under which this year's budget is being fashioned are less than desirable. The economic downturn that has swept our nation has caused revenues in Virginia to shrink considerably. This is not a matter of a slower growth rate; we simply have fewer actual dollars available. |
|
You may rightly ask how we could be the best state in which to do business and the best managed state yet still face this dilemma. First, we are not immune to the factors that have dampened the national economy. Furthermore, our state taxation structure is especially vulnerable to economic fluctuations.
|
Eighty percent of state revenue comes from just two sources - sales tax and income tax. When people are out of work they do not pay an income tax. In addition, they do not purchase as many goods and services, which results in lower revenues from the sales tax. As a result, our current rate of unemployment negatively affects the largest two sources of state revenue in a serious way.
|
|
Our hearts go out to our friends and neighbors who are out of work, but they need more than our sympathy. They need a job.
|
|
The need for jobs is why my attention this session has been concentrated on economic development issues more than ever. We can not tax ourselves out of this budget shortfall; we must grow ourselves out of it. |
|
There are sister states that have neglected maintaining a healthy business climate and are currently suffering as a result. While we should not revel in their misfortune, Virginia should continue to invest in economic development incentives to entice those businesses seeking to relocate or expand. Every day that a new business opens, people are employed, revenue is generated, and we can better afford the vital state services we need and expect.
|
|
My consideration on the budget was guided by the dual concern that we fund essential services to the extent possible while remaining ever cognizant of the effect each action that we take has on our quest to return to economic prosperity. Programs that promote economic development should be pursued. Taxes, fees, and regulations that hamper recovery must be avoided.
|
|
For the most part, this is a budget I can support. I did vote for the budget in committee and in the full Senate. Nevertheless, I felt compelled to register a dissent. One action the budget requires is to reduce the state contribution to the Virginia Retirement System for the next two years. While doing so does not jeopardize the actuarial health of the VRS, it is what I consider a "gimmick" that must be avoided. |
|
The reduction in payments will not be felt in the short run simply because not everyone will retire all at once. However, the fund must be replenished over time. It would be equivalent to you or me taking out a ten year loan to pay for our groceries. |
|
Now that the Senate and the House of Delegates have both passed their version of the budget, the business of melding them into one budget begins. Again this year, I will be one of the members of the conference committee. The same principles that guided me in helping fashion the Senate version of the budget will guide me in negotiations with the House conferees and I believe we can come to a beneficial agreement. |
|
These are certainly difficult times. However, just as our cherished quality of life was not established in a day, it will not be permanently eroded by this economic downturn. As painful as some of the provisions of the budget are, we must stay focused on job creation to generate the revenue needed for our Commonwealth. |
|
Walter Stosch
12th Senatorial District
Commonwealth of Virginia
As always I value the views and insights of my constituents.
My website is always available to you.
on the home page and also via this link.
I look forward to hearing from you. |
|
Please use my Senate website as a useful resource and to contact me
during the General Assembly and throughout the year.
Authorized and paid for by Friends of WALTER STOSCH | |
|
|
|
|
|
|
|
|
