Virginia state budget and finances

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Virginia budget and finances
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General information
Budget calendar:
Biennial
Fiscal year:
2015
State credit rating:
AAA (as of 2014)
Current governor:
Terry McAuliffe
Financial figures
Total spending (state and federal funds):
$44.7 billion (estimated for 2014)
Per capita spending:
$5,367.46 (estimated for 2014)
Total state tax collections:
$19.2 billion (2013)
Per capita tax collections:
$2,319.96 (2013)
State debt:
$91.3 billion (as of 2014)
Per capita state debt:
$11,158 (as of 2014)
State budgets and finances
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Total state expendituresState debtTax policy in Virginia
Note: This page utilizes information from a variety of sources. As such, the currency of the information varies somewhat. The information presented on this page reflects the most recent data available as of February 2015.
Between fiscal years 2013 and 2014, total spending in Virginia increased by approximately $100 million, from $44.6 in fiscal year 2013 to an estimated $44.7 billion in 2014. This represents a 0.3 percent increase. The cumulative rate of inflation during the same period was 1.58 percent, calculated using the Consumer Price Indices for January 2013 and January 2014. As of 2014, financial services firm Standard and Poor's had assigned Virginia a credit rating of AAA.[1][2][3]
In 2012, federal aid accounted for 24 percent of Virginia's general revenues, the second-smallest share in the nation.

Spending

Definitions

The information below comes from the National Association of State Budget Officers (NASBO). These spending figures are broken into three broad categories in order to facilitate comparison between the states.[3]

  • State funds: State funds include general and other state-based funds. A general fund is "the predominant fund for financing a state's operations." Other state funds are "restricted by law for particular governmental functions or activities."
  • Federal funds: Federal funds are "funds received directly from the federal government."
  • Total spending: Total spending is calculated by adding together the totals for state and federal funds.

These figures exclude spending from the sale of bonds.

2014 expenditures

See also: Total state expenditures

The table below breaks down estimated spending totals for fiscal year 2014 (comparable figures from surrounding states are included to provide additional context). Figures for all columns except "Population” and “Per capita spending" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the columns labeled "Population” and “Per capita spending" have not been abbreviated.[3]

In Virginia in fiscal year 2013, estimated total government spending equaled $44.7 billion, a greater amount than in any neighboring state.

Total estimated state spending, FY 2014 ($ in millions)
State State funds Federal funds Total spending Population Per capita spending
Virginia $35,123 $9,568 $44,691 8,326,289 $5,367.46
Kentucky $19,221 $9,614 $28,835 4,413,457 $6,533.43
North Carolina $30,996 $12,850 $43,846 9,943,964 $4,409.31
Tennessee $18,832 $13,231 $32,063 6,549,352 $4,895.60
West Virginia $19,398 $4,412 $23,810 1,850,326 $12,868.00
Per capita figures are calculated by taking the state's total spending and dividing by the number of state residents according to United States Census estimates.[4]
Source: National Association of State Budget Officers

Spending by function

See also: State spending by function as a percent of total expenditures
Breakdown of spending by function in FY 2013
Source: National Association of State Budget Officers

State spending in Virginia can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2013 information is included in the table below (information from neighboring states is provided for additional context). Figures are rendered as percentages, indicating the share of the total budget spent per category.[3]

In Virginia in fiscal year 2013, transportation accounted for 11 percent of total spending, a greater share than in any neighboring state.

State spending by function as a percent of total expenditures, FY 2013
State K-12 education Higher education Public assistance Medicaid Corrections Trans-
portation
Other
Virginia 15.1% 15.3% 0.4% 16.7% 2.8% 11% 38.7%
Kentucky 19.6% 26.7% 0.9% 21.9% 2.4% 9.8% 18.8%
North Carolina 24.8% 12.4% 0.5% 30% 4.6% 10.7% 17%
Tennessee 17.8% 13.9% 0.4% 30.8% 2.8% 6.1% 28.2%
West Virginia 10.5% 13.7% 0.5% 13.5% 1.1% 5.2% 55.6%
Source: National Association of State Budget Officers
Note: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[3]

Spending trends

Between 2009 and 2013, the share of the Virginia state budget spent on K-12 education decreased from 18 percent to 15.1 percent. See the table below for further details (figures are rendered as percentages, indicating the share of the total budget spent per category).[3][5][6][7][8]

Spending by function from 2009 to 2013 (as percentages)
Year K-12 education Higher education Public assistance Medicaid Corrections Transportation Other
2013 15.1% 15.3% 0.4% 16.7% 2.8% 11% 38.7%
2012 16.0% 13.1% 0.4% 16.2% 2.9% 11.3% 40.1%
2011 15.8% 15.3% 0.1% 16.9% 3.0% 10.2% 38.6%
2010 16.7% 15.6% 0.5% 16.1% 3.2% 9.2% 38.7%
2009 18.0% 16.3% 0.5% 15.2% 3.6% 10.5% 35.9%
Source: National Association of State Budget Officers
Note: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[3]

Revenues

2013 revenues

See also: State government tax collections by source

The table below breaks down state government tax collections by source in 2013 (comparable figures from surrounding states are also provided to give additional context). Figures for all columns except "population" and "per capita revenue" are rendered in thousands of dollars (for example, $2,448 translates to $2,448,000). Figures in the columns labeled "population" and "per capita revenue" have not been abbreviated).[9]

Virginia collected approximately $19.2 billion in total state tax collections in 2013.

State tax collections by source ($ in thousands)
State Property taxes Sales and gross receipts Licenses Individual income taxes Corporation net income taxes Other taxes Total 2013 population Per capita collections
Virginia $33,188 $6,192,666 $806,572 $10,900,860 $772,001 $481,566 $19,186,853 8,270,345 $2,319.96
Kentucky $558,377 $5,110,456 $462,534 $3,722,964 $646,875 $314,556 $10,815,762 4,399,583 $2,458.36
North Carolina N/A $9,714,217 $1,543,201 $11,068,166 $1,285,907 $157,087 $23,768,578 9,848,917 $2,413.32
Tennessee N/A $9,128,175 $1,421,174 $262,842 $1,256,173 $298,527 $12,366,891 6,497,269 $1,903.40
West Virginia $6,149 $2,579,011 $137,437 $1,795,947 $242,429 $617,149 $5,378,122 1,853,595 $2,901.45
Source: Tax Policy Center, "State Tax Collection Sources 2000-2013," June 20, 2014
Virginia tax collections by source in 2013
Source: Tax Policy Center

The table below lists 2013 tax collections by source as percentages of total collections. Individual income taxes accounted for nearly 57 percent of Virginia's total state tax collections.[9]

State tax collections by source (as percentages)
State Property taxes Sales and gross receipts Licenses Individual income taxes Corporation net income taxes Other taxes
Virginia 0.17% 32.28% 4.20% 56.81% 4.02% 2.51%
Kentucky 5.16% 47.25% 4.28% 34.42% 5.98% 2.91%
North Carolina N/A 40.87% 6.49% 46.57% 5.41% 0.66%
Tennessee N/A 73.81% 11.49% 2.13% 10.16% 2.41%
West Virginia 0.11% 47.95% 2.56% 33.39% 4.51% 11.48%
Source: Tax Policy Center, "State Tax Collection Sources 2000-2013," June 20, 2014

Current fiscal year budget

See also: Historic Virginia budget and finance information

Fiscal year 2015 and 2016

DocumentIcon.jpg See budget bill: HB 5002

Then-Governor Bob McDonnell announced his fiscal year 2015 budget proposal on December 16, 2013. Under the governor's proposal, total spending for fiscal year 2015 would have equaled approximately $95.9 billion, including $37.7 billion in general fund spending.[10]

On June 20, 2014, Governor Terry McAuliffe signed into law the fiscal year 2015 budget. The enacted budget totaled $96.1 billion.[10]

State debt

See also: State debt

According to a January 2014 report by the nonprofit organization State Budget Solutions, Virginia had a state debt of approximately $91.3 billion. Its state debt per capita was $11,158. The report revealed that state governments faced a combined $5.1 trillion in debt. The obligation amounted to $16,178 per capita in the nation.[11]

Total state debt, 2014
State Total state debt State debt per capita Per capita debt ranking
Virginia $91,339,102,000 $11,158 41
Kentucky $86,245,730,000 $19,689 11
North Carolina $107,580,297,000 $11,032 42
Tennessee $41,049,738,000 $6,358 50
West Virginia $24,972,461,000 $13,459 29
Sources: State Budget Solutions, "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014

Public pensions

See also: Virginia public pensions and Virginia public employee salaries

A 2012 report from the Pew Center on the States noted that Virginia's pension system was funded at 72 percent at the close of fiscal year 2010, below the 80 percent funding level experts recommend. Consequently, Pew designated the state's pension system as cause for "serious concern."[12]

The funding ratio for the state's pension system decreased from 80.20 percent in fiscal year 2006 to 69.46 percent in fiscal year 2011, a drop of 10.74 percentage points, or 13.4 percent. Likewise, unfunded liabilities increased from approximately $10.9 billion in fiscal year 2006 to nearly $24 billion in fiscal year 2011.

Credit ratings

See also: State credit ratings

Credit rating agencies, such as Standard and Poor's, assign grades to states that take into account a state's ability to pay debts and the general health of the state's economy. Generally speaking, a higher credit rating indicates lower interest costs on the general obligation bonds states sometimes sell to investors in order to finance large-scale undertakings (e.g., road construction and other public works projects). This in turn results in lower interest costs, thereby lowering the cost to taxpayers.[13][14]

The table below lists the Standard and Poor's credit ratings for Virginia and surrounding states from 2004 to 2014. Standard and Poor's grades range from AAA, the highest available, to BBB, the lowest.[15]

State credit ratings, 2004 to 2014
State 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004
Virginia AAA AAA AAA AAA AAA AAA AAA AAA AAA AAA AAA
Kentucky AA- AA- AA- AA- AA- AA- AA- AA- AA- AA- AA-
North Carolina AAA AAA AAA AAA AAA AAA AAA AAA AAA AAA AAA
Tennessee AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA AA
West Virginia AA AA AA AA AA AA AA- AA- AA- AA- AA-
Source: Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2014," June 9, 2014

Federal aid to state budget

See also: Federal aid to state budgets

State governments receive aid from the federal government to fund a variety of joint programs, such as Medicaid. Federal aid varies considerably from state to state. For example, Mississippi received approximately $7.7 billion in federal aid in 2012, which accounted for more than 45 percent of the state's general revenues. By contrast, Alaska received roughly $2.9 billion in federal aid in 2012, just under 20 percent of the state's general revenues.[16]

The table below notes what share of Virginia’s general revenues came from the federal government in 2012. That year, Virginia received approximately $9.3 billion in federal aid, 23.5 percent of the state's total general revenues. Figures from surrounding states are provided for additional context.[16]

Federal aid to state budgets, 2012
State Total federal aid ($ in thousands) Federal aid as a % of general revenue Ranking
Virginia $9,278,113 23.53% 49
Kentucky $8,056,691 35.69% 14
North Carolina $15,192,577 33.24% 25
Tennessee $11,198,575 40.97% 3
West Virginia $4,267,399 34.71% 19
Source: United States Census Bureau, "State Government Finances: 2012," accessed February 24, 2014

Stimulus

According to Recovery.gov, the official government website for the Recovery Accountability and Transparency Board, under the American Recovery and Reinvestment Act, Virginia received $3.3 billion in federal funding between February 2009 and June 2013.[17]

The state also received approximately $540 million from the federal government under H.R. 1586, a $26 billion plan to give states money for Medicaid and education that the president signed into law on August 10, 2010.[18]

Budget process

The state operates on a biennial budget cycle. The sequence of key events in the budget process is as follows:[19][20]

  1. Budget instruction guidelines are sent to state agencies in April and August.
  2. State agency budget requests are submitted in June and October.
  3. Agency hearings are held in September and October.
  4. The governor submits his or her proposed budget to the Virginia General Assembly by December 20.
  5. The General Assembly holds public hearings in January.
  6. The General Assembly adopts a budget in March or April. A simple majority is required to pass a budget.
  7. The biennial budget cycle begins in July.

Virginia is one of 44 states in which the governor has line item veto authority.[20]

Though the governor and General Assembly are not required by law to submit or pass a balanced budget, the Virginia Constitution does require the budget to be balanced before the governor signs it into law.[20]

Agencies, offices and committees

The following standing committees in the Virginia State Legislature deal with budget and finance matters:

  1. Appropriations Committee, Virginia House of Representatives
  2. Finance Committee, Virginia House of Representatives
  3. Finance Committee, Virginia State Senate

Studies and reports

U.S. PIRG "Following the Money" report

See also: "Following the Money" report, 2014

The U.S. Public Interest Research Group, a consumer-focused nonprofit organization based in Washington, D.C., released its annual report on state transparency websites in April 2014. The report, entitled "Following the Money," measured how transparent and accountable state websites are with regard to state government spending.[21] According to the report, Virginia received a grade of B+ and a numerical score of 87, indicating that Virginia was an "advancing" state in terms of transparency regarding state spending.[21]

Budget and finance ballot measures

Voting on
state and local
government budgets,
spending and finance
State finance.jpg
Policy
Budget policy
Ballot measures
By state
By year
Not on ballot
See also: State and local government budgets, spending and finance on the ballot and List of Virginia ballot measures

Ballotpedia has tracked the following ballot measures relating to state and local budget and financial matters in Virginia.

  1. Virginia Revenue Stabilization Fund Amendment, Question 3 (2010)

Recent news

This section displays the most recent stories in a Google news search for the terms "Virginia budget."

Some of the stories below may not be relevant to this page due to the nature of Google's news search engine.

Virginia state budget and finances - Google News Feed

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Contact information

Department of Planning and Budget
1111 East Broad Street, Room 5040
Richmond, VA 23219-3418
Telephone: 804-786-7455
Fax: 804-225-3291
Website: http://www.dpb.virginia.gov/

See also

External links

Additional reading

References

  1. Bureau of Labor Statistics, "CPI Detailed Report Data for February 2014," accessed April 9, 2014
  2. InflationData.com, "Cumulative Inflation Calculator," February 28, 2014
  3. 3.0 3.1 3.2 3.3 3.4 3.5 3.6 National Association of State Budget Officers, "State Expenditure Report: 2012-2014," accessed February 18, 2015
  4. United States Census Bureau, "State and County QuickFacts," accessed February 23, 2014
  5. National Association of State Budget Officers, "State Expenditure Report, 2009-2011," accessed February 24, 2014
  6. National Association of State Budget Officers, "State Expenditures Report, 2010-2012," accessed February 24, 2014
  7. National Association of State Budget Officers, "State Expenditure Report, 2009," accessed February 24, 2014
  8. National Association of State Budget Officers, "State Expenditure Report, 2008," accessed February 24, 2014
  9. 9.0 9.1 Tax Policy Center, "State Tax Collection Sources 2000-2013," June 20, 2014
  10. 10.0 10.1 National Association of State Budget Officers, "Summaries of Fiscal Year 2015 Proposed and Enacted Budgets," July 11, 2014
  11. State Budget Solutions, "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  12. Pew Center on the States, "Widening Gap Update: Virginia," June 18, 2012
  13. Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2012," July 13, 2012
  14. Bankrate, "The 6 states with the worst credit ratings," September 27, 2012
  15. Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2014," June 9, 2014
  16. 16.0 16.1 United States Census Bureau, "State Government Finances: 2012," accessed February 24, 2014
  17. Recovery.gov, "Stimulus Spending by State," accessed February 21, 2014
  18. Federal Fund Information for States, “ARRA FMAP Extension & Education Jobs Fund Totals,” August 11, 2010
  19. National Conference of State Legislatures, "State Experiences with Annual and Biennial Budgeting," updated April 2011
  20. 20.0 20.1 20.2 National Association of State Budget Officers, "Budget Processes in the States, Summer 2008," accessed February 21, 2014
  21. 21.0 21.1 U.S. Public Interest Research Group, "Following the Money 2014 Report," accessed April 15, 2014