Division of Legislative Services > Legislative Record > 2005

HJR 707: Joint Subcommittee Studying the Balance of Power Between the Legislative and Executive Branches

June 21, 2005

The joint subcommittee, which began in 2004 (HJR 13) and was continued by the 2005 General Assembly, resumed its study by developing a work plan and reviewing the revenue forecasting process in Virginia and in other states. The joint subcommittee consists of six members of the
General Assembly, Delegates R. Steven Landes (chairman), Harry R. Purkey, H. Morgan Griffith, and Johnny S. Joannou and Senators Jeannemarie Devolites Davis and Mamie Locke, as well as six citizen members, Constance Campanella, Ben Carter, Tim Robertson, John Sherman, David L. Bailey, Jr., and Robert L. Calhoun.


During its first year, the joint subcommittee recommended the introduction of a constitutional amendment to allow Virginia voters to decide whether the Governor should be allowed to succeed himself in office. The constitutional amendment, introduced as HJR 652 and SJR 401, was defeated in the Committee on Privileges and Elections in both houses.

During committee deliberations, members appeared unwilling to consider the amendment without the addition of a proposal counterbalancing the shift of power granted to the Governor if he is permitted to succeed himself in office. The defeat of the measures means that the earliest date a constitutional amendment could appear on the ballot would be 2008, if the General Assembly approves a new amendment during the 2006 or 2007 session and then again during the 2008 session. Because the original amendment was prospective, applying to Governors elected in 2009 and thereafter, a
delay would not affect a current Governor who would not be eligible to serve two consecutive terms. The subcommittee agreed to revisit the constitutional amendment while looking at other proposals that would more equitably balance the fundamental powers between the legislative and executive branches.

The members passed, with overwhelming support, major legislation that establishes a deadline for the submission of resumes and statements of the economic interests of gubernatorial appointees, and codifies the current practice of reviewing the information by a joint subcommittee of the Privileges and Elections Committees.


Overview by Secretary Bennett

John Bennett, the Secretary of Finance, provided members with an overview of the revenue forecasting process in Virginia and in other states. The requirement for the Governor to submit a six-year revenue estimate dates back to 1975 in Virginia. Although the statutory provisions have been amended eight times, the heart of the revenue forecasting process has remained basically the same. The most significant changes to the statute occurred in 1984 when the revenue forecasting process was codified; the General Assembly created two statutory advisory groups to assist in
reviewing economic data and revenue forecasts.

VA's Revenue Forecasting Process

Revenue forecasting begins with the assessment of the national economy. The Department of Taxation maintains contracts with two leading national forecasting firms, Global Insight and Economy.com. Global Insight provides detailed quarterly projections of economic variables, such as employment, income, and housing construction at the national and regional levels. Information from
Economy.com serves as a check on the data supplied by Global Insight.

Materials containing economic data and at least two possible economic forecasts-a standard and an alternate-are considered by the Advisory Board of Economists in mid-October. The advisory board is comprised of academic and professional economists who review the economic forecasts and identify the most likely economic scenario on which to base Virginia's revenue forecast. Although no legislative members serve on the advisory board, staff from House Appropriations, Senate Finance, Legislative Services and JLARC attend the meeting and have an opportunity to comment and ask questions. The Department of Taxation uses the Virginia economic outlook approved by the
advisory board to develop a preliminary revenue forecast. The Department uses forecasting equations for each significant revenue source, developed from past statistical relationships between economic variables and revenues, to predict future revenues. For example, growth in total personal income is used to predict sales tax growth. The results are adjusted to account for changes in federal and state laws.

The Department of Taxation prepares the General Fund revenue forecast for 24 distinct revenue sources, including individual income tax withholding and sales and use tax. Other agencies produce forecasts for specific revenue sources, such as lottery profits and profits from the sale of alcoholic beverages. In mid-November, the Advisory Council on Revenue Estimates reviews the standard and alternate revenue forecasts. The advisory council consists of legislative members, representing the leadership of the houses and the chairmen of the money committees, and business leaders from various industries. Review by the advisory council serves as a reality check on the preliminary forecast with members providing comment on what is currently happening in their industrial sectors, as well as Virginia's economy. The Governor and his staff review the comments from the advisory council, the latest available revenue collections, and any new economic data before finalizing the revenue forecast that will provide the basis for the introduced budget. By tradition, the Governor provides an update of the revenue forecast during the General Assembly session based on the most current revenue collections.

Revenue Forecasting in Other States

The revenue forecasting processes in other states vary significantly. In general, the processes can be grouped into five broad categories based upon who develops the forecast:

  1. Exclusively executive - 5 states, including Georgia and West Virginia.
  2. Executive, with legislative participation/review - 6 states, including Virginia and Delaware.
  3. Joint legislative and executive - 22 states, including Maryland and Kentucky.
  4. Separate legislative - 13 states, including Alabama and Colorado.
  5. Independent - 4 states, including South Carolina and Texas.

Secretary Bennett noted that the variation in the relative roles of the legislature, the Governor, and various independent groups in the revenue forecasting process is attributed to each state's unique constitutional structure and budget process. However, all states use the same basic forecasting model for generating revenue projections. Because forecasting models rely on historical data and trends to predict future revenues, states often face forecasting inaccuracies during peaks and troughs of business cycles. The forecasts tend to overestimate revenue in economic downturns and to underestimate revenues in economic upturns. The Secretary also pointed out that states that have competing forecasts developed by different groups have a built in bias that leads decision makers to choose a higher forecast. Members agreed to examine at a future meeting the correlation between Gross Domestic Product (GDP) and revenues, and the correlation between revenue collections in the first quarter and collections for the remainder of the year.


  • The subcommittee adopted a study plan of the following proposals for the current interim that
    includes items deferred from the subcommittee's last meeting in January:

    Provide for 60-day sessions in odd-numbered years without the two-thirds supermajority vote.
  • Increase legislative appointments on executive boards and commissions that have significant contractual authority, including the State Board of Education, the Commonwealth Transportation Board, and public institutions of higher
  • Allow, by a constitutional amendment, the legislature to nullify or suspend administrative regulations without the concurrence of the Governor.
  • Establish an independent economic and revenue forecasting commission whose members are appointed by the legislature and the
    Governor .


The subcommittee has tentatively scheduled its next two meetings for August 22, 2005, at 10:00 a.m. and September 19, 2005, at 1:00 p.m. in House Room C of the General Assembly Building.

The Hon. R. Steven Landes

For information, contact:
Ginny Edwards, DLS Staff



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