McEachin says McDonnell plan uses education money to fix roads

Democrats say Gov. Bob McDonnell wants to take money away from public schools and spend it on roads.

At issue is the Republican governor’s proposal to increase the share of the state’s sales tax that is earmarked for road maintenance from .5 percent of a purchase to .55 percent. McDonnell says it would generate an extra $110 million for highway upkeep over the two-year budget cycle that starts July 1.

That would be the first step of an eight-year plan by the governor to gradually increase the road maintenance share of the sales tax to .75 percent.  

The General Assembly will vote on the measure this winter and Democrats -- who are a minority in the House and, arguably, in the Senate -- are vowing stiff opposition. The governor’s proposal amounts to "taking money out of our classrooms to pave roads," Sen. Donald McEachin, D-Henrico, said Jan. 11 in the Democratic response to McDonnell’s State of the Commonwealth address.

Is McEachin right? Let’s start with a little background.

The state has a 5 percent sales tax, or five cents on every $1 of purchase. As we’ve noted, a half-penny of that levy goes to highway maintenance. But the lion’s share -- the remaining 4.5 cents, helps support the state’s general fund, which pays for education, health programs and public safety.

The general fund is expected to amass $34.6 billion over the two-year budget cycle starting July 1. McDonnell, in keeping with recent budget standards, has proposed that almost 30 percent of the fund -- $10.3 billion -- be spent in classrooms.

Now, let’s return to McEachin. Our calls to him were referred to the Virginia Senate Democratic Caucus. We spoke to two caucus officials: Steve Pazimino, the executive director, and Katie Mulhall, the press secretary. They justified McEachin’s claim with this contention: It is impossible to take an additional portion of the sales tax out of the general fund without impacting education.

McDonnell, over the next two years, would divert $110 million traditionally earmarked for the general fund and spend it on transportation. Schools would lose about a 30 percent share of that money, or $33 million. That comes to about three-tenths of 1 percent of the money the state spends in classrooms.   

And remember, that would be the first step in McDonnell's eight-year plan. There would likely be at least a fivefold increase in the numbers as the portion of the sales tax dedicated to road repairs gradually increased from .5 percent to .75 percent.

Tucker Martin, McDonnell’s chief of communications, told us there are many programs supported by the general fund. The inference is that Democrats are oversimplifying when they say moving money away from the general fund means moving it away from education.

But McDonnell’s proposal does not identify any general fund programs that would be specifically cut to compensate for the loss of sales tax revenue. The governor’s plan does not protect schools -- or any other general fund service -- from the small fallout.

Our Ruling:

McEachin, speaking on behalf of Democrats in the General Assembly, said McDonnell’s proposed budget would take "money out of our classrooms to pave roads."

He was referring to an eight-year plan by McDonnell plan to gradually increase the small portion of state sales revenues earmarked for road maintenance. The governor’s proposal would remove $110 million from the state’s general fund during the next two budget years.

About 30 percent of the general fund goes to classroom education, so schools stand to lose $33 million. The biennial school loss would grow to at least $165 million when McDonnell’s plan was fully phased in.

Put in context of the overall state education budget -- McDonnell wants to spend $10.3 billion in classrooms over the next two fiscal years -- the loss does not seem catastrophic. But there is no doubt McDonnell’s would narrow a guaranteed source of revenue to education without opening a new source.  

We rate McEachin’s statement True.

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