The Washington Post asked this question on March 11: is it wise to use the General Fund? Honestly, I don’t know where to start. I guess I’m supposed to take a deep breath and count to ten first, but have any of these people even looked at a summary of the Virginia State Budget?
Here’s the deal. There is only one State Budget. Politicians have decided over the years to divide it into two ‘funds’ for lack of a better word: The Non-General Fund (NGF) and the General Fund (GF). The basic convention is that the Non-General Fund is an accounting repository for funds that are ‘dedicated’ to certain purposes. (Notice dedicated is in quotes.)The General Fund, on the other hand, is the accounting repository for revenues not specifically dedicated to any purpose, hence the use of the word ‘General.’
You read this article, and any of the other hundreds like it, and you would think there is a brick wall between these funds and the programs they fund. If something like Transportation is already funded by the NGF, never shall it see appropriations from the GF, right?
The article in the Post, as well as many others, seems to say so. “In
Virginia, transportation needs have historically been paid out of a separate pot of money derived from a gasoline tax, a portion of the state sales tax and other fees. Money for schools, health care, parks, public safety and other services comes from the general fund, which is supported by money from income, corporate and sales taxes.”
Here is the actual breakdown of funding, for Fiscal Year 2007 – which is typical and not unusual in any way – for the General Fund sacred Secretariat cows of Education, Health and Public Safety that the Governor claims would be harmed by building roads.
Education GF $7.6 billion, NGF $6.0 billion
Health GF $3.7 billion, NGF $5.3 billion
Public Safety GF $1.6billion, NGF $728 million
And what about Transportation?
GF $490 million, NGF $4.4 billion
Say it isn’t so. . .Transportation already gets $490 million in General Funds annually? And the so called ‘starving’ programs of Education, Health and Human Services and Public Safety get in some cases more than half their appropriations from the NGF. What about the ‘historical’ separation we keep being warned about? I hate to be the one to pull back the curtain, but this absurd suggestion that keeps being made that there is some kind of embargo between the GF and NGF is just hogwash.
Here is what this is really about. Raising taxes ostensibly to pay for a roads bill will mean that there is more money to spend on other stuff. It isn’t a tax to pay for roads, it’s a tax so the government can spend more on things other than roads.
This Post article has some telling quotes: “. . .if a sharp economic downturn occurs, budget analysts worry that the state will be saddled with tough choices.” Has our modern world finally come to this, that in tough economic times the Government will have to make tough choices about spending? Thank goodness the Governor can raise my taxes now so we can avoid this unseemly situation. (Of course, does anyone think that no matter how much money they raise, that there won’t be squealing in Richmond if there’s a down turn? It really is never enough.)
And then there is this nugget: “. . .voters are going to be asked to choose between vastly different visions for ensuring that government is adequately funded.” Yep. One says don’t spend beyond you means, which are already growing faster than Personal Income, and one says there is no limit to how much of your Personal Income the government should confiscate to pay for whatever it wants to buy.
