Virginia will spend surplus on state employee bonus, roads, bay cleanup
Gov. Robert F. McDonnell (R) announced Thursday that Virginia will spend its budget surplus on a bonus for state employees, cleaning up the Chesapeake Bay, transportation and education.
McDonnell told legislators the state will spend $82.2 million on a 3 percent bonus for state employees, $18.7 million for education, $60.4 million for roads and $36.4 million for Virginia's Water Quality Improvement Fund, which is used for the Chesapeake Bay cleanup. State employees have not received a raise since November 2007.
Other money will be spent on previous obligated accounts, such as snow removal. McDonnell has until Nov. 1 to recommend to spend a remaining $87.5 million.
Virginia ended the fiscal year with a surplus of about $403.2 million -- almost twice the previous estimate, state officials said earlier this week.
About $228 million was generated through tax collections, and the rest through state agencies' unspent balances. Most of the money from tax collections -- $220 million -- was announced in July. But the unspent balances were unexpected.
McDonnell made his announcement in his annual speech to the House Appropriations and Senate Finance committees -- one of his three major speeches to the General Assembly. In past years, former Democratic governor Tim Kaine's annual speeches have centered on budget cuts.
Several legislators had encouraged McDonnell to repeal accounting maneuvers used when legislators wrote the budget in the spring -- accelerating sales tax payments by businesses and delaying payments to the Virginia Retirement System.
"I share Gov. McDonnell's excitement about the steady improvement in Virginia's economy," Del. Ben Cline (R-Rockbridge) said. "But before we rush to spend any surplus, we should first put our fiscal house in order...By dedicating a portion of any future surplus toward removing these provisions from the state budget, the governor can demonstrate Virginia's continued commitment to fiscal responsibility, preserve our reputation as the best-managed state in the Nation, and continue Virginia on the road to economic recovery."
Colleges and universities that did not spend all their funds are allowed to keep their balances if they achieve certain management standards, said Robert Vaughn, staff director for the House Appropriations Committee. But McDonnell can recommend to the General Assembly how to spend other money.
The General Assembly closed a $4 billion shortfall when writing the $78 billion two-year budget for fiscal 2011 and 2012 with no general-tax increase but did include several fees and hundreds of millions in cuts, including to health care, schools and public safety.
In July, Virginia became one of at least 10 states that had reported finishing the fiscal year in the black.
The revenue outlook was brightened largely because of higher individual and corporate income-tax withholdings, signs of a stabilizing economy. Revenue dropped just 0.6 percent instead of the projected 2.3 percent.
August 19, 2010; 10:00 AM ET
Categories: Anita Kumar , General Assembly 2010 , House of Delegates , Robert F. McDonnell , State Senate , Timothy M. Kaine , Transportation
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