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Jewish World Review
August 23, 2011
/ 23 Menachem-Av, 5771
Yes, Virginia, There is a Surplus!
While the federal government continues to drown in a sea of debt, several states are reporting surpluses, thanks to policies Washington would do well to emulate.
Nowhere has the economic turnaround been more immediate than in Virginia. When Governor Bob McDonnell took office in January 2010, he was faced with a $2.2 billion shortfall bequeathed to him by outgoing Democratic governor (and now Senate candidate) Tim Kaine. In less than two years, McDonnell has delivered two budget surpluses without raising taxes or causing harm to the "most vulnerable." Instead, he has judiciously cut spending.
Last week, the governor's office announced a surplus of $544.8 million. That is $234.1 million more than McDonnell told the legislature on June 30 he has saved state taxpayers. Call it compound savings.
According to the Pollina Corporate Real Estate Study: "Pollina Corporate Top 10 Pro-Business States for 2011," "Virginia is the unquestionable brightest star on the American flag when it comes to pro-business. ... Virginia is truly in a class by itself." Nine other states made Pollina's list. Republican governors lead eight of them. Anyone else see a pattern?
Compared to the federal economic picture, Virginia's statistics are astounding: In less than two years, McDonnell's administration reports that it has added 48,200 net new jobs. As recently as 2009, Virginia ranked 35th nationally in jobs created. Significantly, "only 8 percent of net new jobs are government positions."
Virginia's "6.0 percent unemployment rate is tied for eighth lowest in the nation," though the Washington Times reports, "the state will likely have to borrow an additional $251 million ... to pay back the federal government for loans to its unemployment insurance trust fund." The loans were necessary because of the economic recession and the aftermath of the Kaine administration, which ran out of money in 2009 and had to visit the federal trough.
Last month, CNBC named Virginia the "Best State for Business."
In May, a Washington Post poll found that while only 31 percent of Virginians believe the country is on the right track, 52 percent think their state is headed in the right direction.
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The Pollina study, according to the McDonnell administration, is "the gold standard for evaluating and ranking states based on 32 factors controlled by state government, including taxes, human resources, education, right-to-work legislation" (this one is key because it reduces union power to strangle businesses with ever-growing demands for benefits), "energy costs, infrastructure spending, workers compensation laws, economic incentive programs and state economic development efforts. Two new factors -- state budget deficit and state property tax index -- along with a comprehensive State Report Card are new to this year's study."
Gov. McDonnell has plans for the surplus: "We will deposit another $132.7 million into the state's Rainy Day Fund. And we will ask the general assembly to create a 'Federal Action Contingency Trust' Fund that will help increase our ability to handle the impact of likely future federal reductions. I am recommending that $30 million from the surplus be used to initiate this fund." At least a small portion of the surplus should go to state taxpayers who earn the money, which would be "stimulus" of a different sort.
The reason Washington -- and especially the Obama administration -- has difficulty replicating what is occurring in Virginia and those nine other states is because it's incapable of abandoning a failed ideology. When old ideologies have proven bankrupt, they are mostly discarded and replaced with something new that has a better chance of working. But the liberal ideology that government can better care for you than you can care for yourself remains on life support, though clearly it, too, has failed.
An old Virginia slogan says, "Virginia is for Lovers." A new one might say, "Virginia is for business."
Jobs created in Texas during Governor Rick Perry's terms are receiving national attention, but Texas didn't make Pollina's list. Perhaps that's because, according to the Bureau of Labor Statistics, in Texas jobs in the private sector declined 0.6 percent while those in government increased 6.4 percent.
Should our nation's capital be moved to Richmond? Perhaps electing a Republican president in 2012 who thinks like Bob McDonnell would be easier and more practical.
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JWR contributor Cal Thomas is co-author with Bob Beckel, a liberal Democratic Party strategist, of "Common Ground: How to Stop the Partisan War That is Destroying America". Comment by clicking here.
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