Reichley Column: A brand new day

The start of a new decade brings a change for our state with the swearing-in of Bob McDonnell last Saturday. At the pre-inaugural prayer breakfast, McDonnell praised his predecessor, Tim Kaine, calling him a friend, and "a man of immense faith, somebody who has always tried to seek divine guidance when making decisions to guide the commonwealth." In his inaugural address, McDonnell continued thanking Kaine "for his leadership and service to our commonwealth."

Then McDonnell got to work making good on two campaign promises -- signing orders to create citizen-based commissions on government reform and jobs creation. The first will once again seek to find ways to deliver government services more efficiently. The second will focus some real attention on unemployment in Virginia, as we try to overcome the unfriendly employment environment of the past year. This commission will focus on impediments to employment, and how the state can encourage hiring and strengthen our position as the best state for business.

Virginia jobs are the key to our prosperity. While some of our budget problems are caused by out-of-control spending, expected tax revenue is down sharply over the past two years. Virginia has maintained a healthy budget because low unemployment and a business-friendly atmosphere provided a broad tax base giving us a solid revenue stream with the individual tax burden at a reasonable level.

But with businesses reeling from an oppressive economy, and unemployment at historically high levels, the state is receiving fewer tax dollars. Raising tax rates is not an option. In good times, the tax rate is sufficient to provide plenty of money for necessary government services. And in bad times, people are hurting enough without trying to raise their taxes. Kaine proposed a big tax increase, but there doesn't appear to be any support for it in the legislature.

In fact, Democrat Dave Marsden, who just won Ken Cuccinelli's 37th district senate seat, did so by promoting himself as a fiscal conservative and promising to oppose new taxes and spending. From his Web site: "I believe in holding the line on taxes and spending." The people of his district will certainly hold him to that pledge.

Local governments are hurting because the state has fewer dollars to send our way, and the poor economy has depressed home values, lowering property tax revenue. While the localities can raise tax rates to make up for the low values, people don't have the money to pay more in property or any other taxes. Fortunately, our county supervisors understand this and are working to hold the line on tax increases.

The key is to get people back to work. When employers can create real jobs, people get paid and government gets more money. Unfortunately, the past year the federal government attempted to "stimulate" the economy by essentially paying people's salaries. This is good for the people who get the money. But it does little to improve the government's balance sheet, or the economy, since every dollar the government "gives out" comes out of the economy, where it otherwise would have generated real jobs. Watching unemployment rise and tax revenues fall while the feds pumped hundreds of billions of dollars into "job creation" should be a life lesson for a generation of voters.

But government can help by providing a job-friendly environment. Unfortunately, we've created a very job-unfriendly environment this past year. New taxes, regulations, mandates, reporting requirements and uncertainty have tied the hands of businesses large and small who are afraid to take on any responsibilities until they know exactly what new rules the government might impose.

We don't have much control over that, except by voting out the people who have imposed these regulatory and other burdens on business. But within the state, by keeping tax rates low and by encouraging business opportunities, we can mitigate the national economic drag. And by opening up new opportunities, we can encourage new business ventures and jobs.

For example, McDonnell has reversed Kaine's position on offshore gas drilling, urging the feds to open up new leases for auction. This could create thousands of jobs, and by itself provide more than enough tax revenue to pay to re-open all the closed rest stops in our state.

Hopefully, the job creation commission can come up with many other suggestions to get our Virginia economy back on track, get our people employed and get our state out of the fiscal mess it is in today.

Charles Reichley has been a Prince William County resident since 1981. He can be reached at criticallythinking@msn.com.