Show Me The Money!
(the 2004 Richmond Report)

by Dave Watts
(Who is Dave Watts & what else has he written?)

What money? There may not even be a budget this year for the Commonwealth of Virginia! Another "first" for the Commonwealth?

The goal of this article is to explore the budget proposals for the next biennium (2004-2006), compare this budget to last year’s, explore the impact of a government shut down, and finally highlight legislation enacted during this session of the General Assembly.

Last year the Commonwealth struggled through a major fiscal crisis, possibly the worst in more than 50 years. Fortunately, the bass fishery programs of the Department of Game and Inland Fisheries ("DGIF") faired no worse or better than the majority of other state programs.

In 2003 DGIF funding was decreased around $5 million per year, resulting in an annual operating budget of $41 million. This reduction was in addition to the $5 million cutback in funding imposed by the General Assembly in 2002. DGIF programs survived, but at a significantly reduced level. These numbers are important. They provide a basis to assess and rank Virginia’s conservation programs relative to other states. Let me provide some statistics (based on per capita spending and revenues) for 2003.

Virginia is the 14th richest state in the Union
Virginia ranks around 42nd in level of taxation
Virginia ranks 3rd in spending on police and corrections
Virginia ranks 50th - dead last - in spending on conservation programs
Virginia conservation programs receive less than 1% of a $50.5 billion dollar state 2002-2003 budget

Let me repeat: Virginia is dead last in over all conservation program spending! In my view that is also dead wrong.

Hopefully, this year Virginia will move out of the cellar. The Governor’s budget for 2004-2006 does not repeat history. Instead, the DGIF operating budget will be increased from $41.4 million to $45.6 million. $700,000 of this increase is tied to raising the sales and use taxes, which are proposed as part of the Governor’s tax reform. The Senate and House budgets, however, deleted the $700,000, in part, over disagreement on the sales and use tax reforms.

The disagreements over tax reform and spending levels has now lead to a major, unprecedented budget impasse. As of the time of this article, there is no budget agreement, and, well, no one knows what will happen! If a budget is not passed by June 30, 2004, the Commonwealth may be forced to shut down. This happened at the federal level in 1995. The results were interesting. While the defense, national security, and public safety programs remained in place, many domestic programs were shut down for several weeks. For example, all areas of the national park system and national wildlife refuge system were closed to the visiting public. Most significantly, the visa and passport programs of the State Department were also shut down. The inconvenience to the citizens was dramatic and frustrating. Eventually, in part, as a result of the wrath heaped onto the politicians, a compromise was reached and a federal budget was passed.

At the state level budget impasses have already occurred twice in the 21^st Century. In 2002 Tennessee reached an impasse, 22,000 nonessential state employees were furloughed, and a budget was only passed when the governor agreed to raise the sales tax. Last year Pennsylvania had a budget dispute that lasted six months. The impasse was only broken when the legislature agreed to raise the taxes on income and cigarettes. Will this history be repeated in Virginia?

If the Commonwealth is shut down on July 1, 2004, the impact on services could be significant. It is fair to suggest, in my view, that all Virginia park areas will be closed, such as the ramp at Leesylvania State Park. I would even speculate that the ABC stores will be closed as well as all the DMV offices. There is some good news here - at least there might not be as many drivers, or drunk drivers for that matter, on the roads. State Police, prisons, and other elements of public safety would remain operational, as they are historically viewed as "essential" services and programs.

The impact of a shut down on the DGIF warm water fishery programs could be significant. If you assume that many of the DGIF programs are "nonessential," the fishing programs and research activities would come to a halt or at least be interrupted. The impact can be appreciated by examining the DGIF programs and funding sources.

Fishing licenses - This source of funding amounts to around $8 to $9 million per year. (Total revenue from both hunting and fishing licenses runs around $18 million per year.)

Boat titling and registration fees and watercraft sales and use tax revenues - This source of funding supports the DGIF programs for recreational boating.

Sales tax collected on hunting, fishing and wildlife-watching equipment - This source of funds is now at $10.5 million per year, down from $12 million, as a result of a new survey. The money is transferred into the Game Protection Fund from the total sales tax collections deposited into the General Fund. These taxes are also known as HB 38 Funds, as the transfer of up to $13 million was authorized in 1998 by House Bill 38.

General Fund Appropriations - DGIF does not received General Funds except for a few specific projects.

Capital Construction Funds: This is another source of money paid out of the General Fund for construction, land acquisition, and major maintenance. This source of funding for DGIF has been zero, with a few modest exceptions.

Federal Aid in Sport Fish Restoration - This source of funding comes from the U.S. Fish and Wildlife Service under what is now called the Federal Aid in Sport Fish Restoration Program (SFRP). It amounts to around $4 million per year or approximately 18% of the DGIF budget.

The federal SFRP program provides 75% federal matching funds for any approved state fishery restoration project.

While all the DGIF programs are funded directly from licenses and fees, rather than money from the General Fund appropriation, the Commonwealth’s budget is also the law controlling the expenditure of state funds. Stated another way, absent a budget, DGIF will receive revenue from fees and licenses, but may not have the power to spend those funds. While the pot may be filled with license and fee revenues, no authority exists to "ladle out" the funds until a budget law is finally passed.

I can only speculate at this moment in time, what might be the "fall out" from failure to reach a budget agreement. What is certain is this: all the lawyers in three piece suits will be burning the midnight candles to determine who are the nonessential employees and which programs are shut down. Stay tuned, and follows this advice: fish early and often!

Legislation - No report would be complete without a brief discussion of some of the legislation passed this session by the General Assembly, and hopefully signed.

House bill 301 will authorize the Board of Game and Inland Fisheries to revise fees for hunting, trapping, fishing and motorboat registration through their regulation process. The fees could not be changed more than once every three (3) years, and any increase or decrease in a fee could not be for more than $5.

House bill 1452 will authorize combined fresh water and saltwater fishing licenses, and establish a special combined fishing license for persons who want to fish in freshwater and saltwater. If a person purchases this license, he will not have to buy a basic state fishing license issued by the Department of Game and Inland Fisheries or the saltwater recreational fishing license issued by the Virginia Marine Resources Commission. The cost of this license is $19.50 for residents and $37.50 for nonresidents. Of the $19.50 fee for the resident combined license, $7 will be paid into the Virginia Saltwater Recreational Fishing Development Fund, $12 will be paid into the Game Protection Fund and 50 cents will be paid to the fishing license vendor. Of the $37.50 fee for the nonresident combined license, $7 will be deposited in the Virginia Saltwater Recreational Fishing Development Fund, $30 will be deposited into the Game Protection Fund and 50 cents will go to the license vendor.

The bill also establishes a trip license that allows persons to fish in all inland and tidal waters for five successive days. This license can be obtained in lieu of having to purchase a basic trip fishing license and a saltwater recreational license at a cost of $10.50 for residents and $15.50 for nonresidents. Five dollars per license sold will be paid into the Virginia Saltwater Recreational Fishing Development Fund, and $5 per resident license sold and $10 per nonresident license sold shall be paid into the Game Protection Fund. The license vendor will receive 50 cents for each license sold.

There is more good news. Various bills introduced in 2003 that would dissolve DGIF and merge it with the Marine Resources Commission were not reintroduced. Hopefully, this issue is now dead in the water. It is important to note that this restructuring of the state government was not recommended by the Wilder Commission's review of state programs and activities.

A similar death occurred to legislation which sought to limit the warm water fishery programs to just the funds from fishing licenses. This bill was not reintroduced in the 2004 session. This type of legislation is very short sighted and would result in the loss to DGIF of $22 million in future revenues.

Now for some really good news. Bass fishermen should go to the DGIF web site for further information on their programs and activities - www.dgif.state.va.us. And, if you ever need to buy a friend a fishing license on short notice go to the DGIF web site where fishing licenses can be bought directly on-line. Similarly, watercraft registration renewals may now be purchased on line at the DGIF's web site.

HB 38 Report

In closing, I urge all bass fishermen to go to the DGIF’s web site to read in full the "H.B. 38 Study." This is the seminal study on the future for DGIF programs. They study is comprehensive, complete with surveys, financial date, and recommendations. If you wish to participate in the debate over the future of Virginia’s fishery programs, this is a "must read" report.

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