Political observers expect budget shortfall to overshadow 2008 sessionJanuary 01, 2008 12:23 PM
RELATED VIDEO Political Roundtable
Virginia Business invited a panel of four political observers to share their insights on the 2008 session. The group included Jeff E. Schapiro, political reporter and columnist for the Richmond Times-Dispatch; Stephen J. Farnsworth, associate professor of political science at the University of Mary Washington; Hugh Keogh, president of the Virginia Chamber of Commerce; and Christina Nuckols, an editorial writer for the Virginian-Pilot.
Virginia Business: What legislation affecting business is expected to come before the General Assembly, and how would the shift of power in the Senate affect these business issues?
Farnsworth: I think that the real question is how to deal with the budget shortfalls that now exist and are going to exist in the coming years. I think that fundamentally is the North Star of all the political decisions that are going to be made in Richmond in the next year. And it seems to me that things are going to get worse before they get better. …You see a lot of people cutting back. When people cut back, that means that there’s less sales tax revenue…I think one possible place that the legislature may go in order to balance the budget is perhaps to move in the direction of additional taxes for business.
VB: I was wondering whether you think transportation will come up again?
Schapiro: [The] regional components of the transportation plan are in peril. There is already a legal question about it. And there could be a Supreme Court hearing just as the legislature is returning to town. … But with the housing market as soft as it is, neither Hampton Roads nor Northern Virginia will be able to capture the property sales driven dollars that they say they need to support transportation projects. So that may be something subject to some retooling.
VB: [Immigration reform] bills that have been proposed in past legislative sessions have not survived. Do you think that’s likely to be the same situation this session?
Keogh: The notion, the concept of federal pre-emption really takes the sting out of practically anything the state would do on a statewide basis. There is a lot of posturing. It’s an easy issue to demagogue. But as a practical matter, the 50-odd pieces of legislation on this issue that were raised or added in ’07, and could return in ’08, probably would not withstand a court challenge at the federal level…So, I really don’t think there will be a lot that will come out that will actually be passed, first of all. And secondly, if it did, I think it would be subject to some serious court challenge.
VB: We’ve talked a little bit about the $641 million shortfall. Does that mean that Kaine’s pre-kindergarten plan is dead?
Nuckols: No. I think that there is some buy-in on some aspects. It really gets into a bidding game, at this point, on money and the rainy-day fund issue, and exactly what revenues look like by the time legislators get to Richmond in January will have a huge affect on what can be done. Kaine has already shifted pretty dramatically in what he’s talking about. He’s not talking about universal pre-K; he’s talking about expanding an existing program that helps lower income children. And, for the most part, what you hear from Republican lawmakers, even when they’re being critical, is that they agree that that’s valuable…. So, the issue really is how much is it going to expand and how quickly. If you have a speedy and dramatic increase in this program, as Kaine wants to do, then you have to reach out to private providers, religious providers, and have some of these children served in non-public school environments. How you do that is very difficult, and that’s where you’re going to see a lot of philosophical disagreement. But I think that in some form we will see some expansion of this program.
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