Monday, December 17, 2012

After a Decade of Hardship, State Spending Still Up

As Virginians ponder the amendments to Virginia’s two-year budget proposed this morning by Governor Bob McDonnell, it is worth remembering the extent to which state government spending has increased over the past 10 years despite three years of hardship occasioned by the 2008 recession.

Over the last decade, Virginia’s operating budget increased by $15.4 billion (62%) — a 35% increase in general funds and an 86% increase in non-general funds. When controlling for growth in population and inflation, total budget growth was 18% over the ten-year period.

So says “The Review of State Spending: 2012 Update” released November by the Joint Legislative Audit and Review Commission (JLARC). After adjustments, General Fund spending actually declined 1% over the decade but non-general fund spending more than made up the difference.

Nine of 196 programs — including health care, education and transportation — accounted for 78% of the total budget growth over the 10-year period. Interesting… health care, education and transportation are three of the most dysfunctional sectors of Virginia’s (and the United States’) economy. All three sectors are exempt from market discipline, and all three are resistant to  fundamental re-thinking or reform. While tinkering on the margins, Virginia’s political establishment continues to pump more money into these broken institutions.

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