House of Delegates
commonwealth of virginia
HOUSE OF DELEGATES
richmond
appropriations committeeVincent F. callahan, jr., chairman
9th Floor, generalassemblybuilding
capitol square
post office box 406
richmond, virginia23218
804-698-1590
December 1, 2018
Mr. Richard D. Brown
Director, Department of Planning and Budget
PatrickHenryBuilding, Room 5040
1111 East Broad Street
Richmond, Virginia23219
Dear Ric:
I write in response to your memorandum to the Committee in which you seek to clarify the purpose of the “base” budget. While I would agree that the development of the base budget serves as a starting or reference point for the 2006-08 biennium, I would disagree in your characterization that it has no significance to the overall budget development process and that it is merely a “technical” exercise.
Your memo states “The base budget is a preliminary number, and does notrepresent a funding commitment, proposal, or recommendation from or byanyone.” This is inconsistent with the fact that written instructions were sent to agencies in June 2005 for preparation of the base budget, along with instructions on how “base budget adjustments” were to be made. The instructions are quite clear that “mandatory” adjustments would be communicated to the agencies from Planning and Budget. According to the instructions, these adjustments would include “removal of one-time costs or savings.” These instructions clearly suggest that the preparation of the base budget is part of a formal budget process in which preliminary decisions are made.
In your presentation before the Committee you state on page 3 (attached) under the definition section that the base budget “consists of the 2006 legislative appropriation with certain additions or subtractions to account for one-time spending and savings that do not continue into the future…”
Mr. Richard D. Brown
September 22, 2005
Page Two
On Thursday, September 15, 2005, your office submitted to the House Appropriations and Senate Finance Committees a detailed listing of agency base adjustments approved in-the-track. I have attached the page detailing the adjustments that have been approved for the Department of Transportation. Under the “Summary of Request” it notes that the $290.0 million representing the FRAN debt service and the Insurance Premium revenues were being removed from the base budget and that these dollar amounts were “…not considered a continuing revenue source for transportation.”
In contrast to the funding adjustments for transportation, I would note that the base budget for Car Tax funding (see attached details) was adjusted upward by $415.2 million in order to bring the car tax reimbursement funding up to the $950 million cap. Of course, the $950 million cap is set forth in the Code, just as the Code requires that one-third of the insurance premium tax be deposited into the Transportation Fund.
Ric, clearly the development of the base budget is driven by preliminary decisions made by someone. Whether subsequent decisions are made through the “decision package process” is yet another step. However, in my more than 20 years of building budgets, the development of the base budget has always been an integral step in the overall budget process. The base budget serves as a reference point for policy makers as it reflects the cost of maintaining existing services based on current policy and law. It is only after the development of the base budget that we can then determine the amount of discretionary revenues that are available in which subsequent funding decisions can be made.
In closing, what concerns the members is that a decision was made to remove the transportation funding from the base budget under the pretense that this was one-time funding. The characterization that the 2005 Transportation Initiative was a one-time action does not reflect the intent of the General Assembly or comport with that which is required by law.
Sincerely,
Robert P. Vaughn
Staff Director
Cc:Members, Appropriations Committee