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April 4, 2004

To the editor,

Regarding Delegate G. Glenn Oder’s recent proposal of a "buffet of revenue increases" (Hampton Roads Daily Press "Other Voices: Deal must include tax hikes, "4/1/04), Delegate Oder claims to have asked the tough questions and evaluated the answers.

From whom did he get the answers?

Could it have been from government administrators who gave him misleading answers because they want more taxes?

For example, Delegate Oder states, "during the past four years the portion of the budget that is paid for with general tax dollars has grown a mere two-tenths of 1 percent."

This is perhaps the most-publicized half-truth of the budget debate.

He speaks of flat tax revenues following the burst of the dot-com boom in 2001.

What Delegate Oder overlooks is the surge in tax revenues during the dot-com boom, between 1996 and 2000. During that period, tax revenues increased nearly ten percent per year.

To keep up with inflation, population, and school and college enrollment, revenues need to increase a bit less than four percent per year.

When you average the surging revenues of the dot-com boom with the flat revenues since, the average increase in tax revenues since 1996 is just under 6 percent. This is much more than is necessary to keep up with inflation and population.

Even without tax hikes, revenues are returning to their normal growth rate of 5.5 percent per year.

Moreover, Delegate Oder overlooks the findings of the Virginia Joint Legislative Audit and Review Commission’s (JLARC) report, Review of State Spending: December 2003 Update. Table 3 in that report shows that inflation-adjusted spending for public schools has been increasing nine times faster than enrollment. It also shows that inflation-adjusted spending for Virginia’s four-year public colleges has been increasing more than three times faster than enrollment.

Delegate Oder does not acknowledge nor justify this surge in spending for public education.

The problem with public schools is poor instruction, especially in reading. Beginning readers need phonics-based reading instruction. Nevertheless for nearly a century, public schools have expected children to read words without teaching them to how to sound out those words. The result is a large number of children who have special needs because they are poor readers. However, schools have no incentive to fix the problem since more special-needs children means schools can demand more funding for mandated special-needs programs.

Delegate Oder cites the increase in Medicaid recipients.

About a third of Medicaid is for disabled persons. This is valid.

However, another third is for single-parent welfare families. The surge in welfare support for unwed mothers has increased the percentage of American children born out of wedlock from seven percent in the 1960s to 33 percent today. Single-parent children are at high risk for academic failure, poor health, and crime.

Another third is for nursing homes. Half as many of the elderly live with their children compared to fifty years ago. High taxes drive husband and wife into the workforce so they then have to rely on government to do what families used to do, i.e., care for children and parents.

Entitlements for the elderly are a time bomb. In 1950 there were 15 workers for every social security recipient. Today there are only three. High taxes discourage the middle class from having children. The result is that there will not be enough children to take care of the elderly themselves or pay taxes for someone else to take care of them. This is a growing problem in developed European nations, which are experiencing population declines due to low fertility rates.

Delegate Oder then cites the growth in prison inmates. What he does not state is that most prison inmates probably grew up on welfare.

Delegate Oder alludes to the state’s AAA bond rating when he mentions the rainy-day fund. The bond rating is jeopardy due to excessive bond sales, not low taxes. Ten years ago revenues from Virginia bond sales were four times larger than the debt service. Today bond sale revenues are about the same as debt service payments.

Delegate Oder states that the "ultra-conservative spending approach would sacrifice too many important state government responsibilities." To what responsibilities does he refer? Not teaching children how to read? Breaking up families with welfare? Turning vulnerable youth into felons? Driving husbands and wives into the workforce so government can replace families?

Delegate Oder’s buffet of tax hikes rewards and subsidizes government mismanagement.

(Visit Delegate Oder’s column)