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Revision as of 14:40, 28 August 2014


Virginia state budget

Flag of Virginia.png
Budget calendar:  Biennial
Current fiscal year:  2012-2014
State credit rating:  AAA (as of May 2012)
Current governor:  Terry McAuliffe
Financial figures
GF expenses[1]:  $17.7 billion
All funds expenses:  $44.6 billion (FY 2013 estimate)
Spending % change:  Green Arrow Up Darker.svg3.95%[2]
% from federal funding:  23.53%
State debt:  $91,339,102,000
Per capita state debt:  $11,158
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Policypedia Budget Policy-logo-no background.png
This page contains information about budget processes and policy issues in Virginia, including:
  • A summary of the budget drafting process
  • Trends in expenditures and revenues
  • Current and past fiscal year budget developments
  • Financial transparency measures

Between fiscal year 2009 and fiscal year 2013, Virginia's total expenditures increased by approximately $3.8 billion, from $40.8 billion in 2009 to $44.6 billion in 2013. This represents an 8.52 percent increase, below the cumulative rate of inflation during the same period (9.06 percent, calculated using the Consumer Price Indices for January 2009 and January 2013).[3][4]

Budget process

The state operates on a biennial budget cycle. The sequence of key events in the budget process is as follows:[5][6]

  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.[6]

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.[6]

Expenditures

Definitions

Although each state executes its budget process differently, the National Association of State Budget Officers (NASBO) breaks down state expenditures into four general categories. This allows for comparisons among the 50 states. NASBO's categories are as follows:[7]

  • General fund: "The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state."[7]
  • Other funds: "Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds."[7]
  • Federal funds: "Funds received directly from the federal government."[7]
  • Bonds: "Expenditures from the sale of bonds, generally for capital projects."[7]

2013 expenditures

Breakdown of expenditures in FY 2013.
Source: National Association of State Budget Officers

The table below breaks down expenditures for fiscal year 2013 (comparable figures from surrounding states are provided to give additional context).[7] Figures for all columns except "Per capita expenditures" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita expenditures" have not been abbreviated.

Total state expenditures, FY 2013 ($ in millions)[7]
State General fund Federal funds Other funds Bonds Total Per capita expenditures**
Virginia $17,691 $9,546 $16,191 $1,167 $44,595 $5,398.65
Kentucky $9,426 $8,001 $8,246 $0 $25,673 $5,841.02
North Carolina $20,602 $17,459 $12,543 $785 $51,389 $5,218.19
Tennessee $12,622 $13,055 $5,394 $382 $31,453 $4,841.92
West Virginia $4,159 $4,394 $14,736 $74 $23,363 $12,599.34
**Per capita figures are calculated by taking the state's total expenditures and dividing by the number of state residents according to United States Census estimates.[8]
Source: National Association of State Budget Officers

Expenditures by function

Breakdown of expenditures by function in FY 2012.
Source: National Association of State Budget Officers

State expenditures in Virginia can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2012 data is included in the table below (information from neighboring states is provided for additional context). Figures are rendered as percents, indicating the share of the total budget spent per category.

Expenditures by function, FY 2012 (as percents)[7]
State Elementary and secondary ed. Higher ed. Public assistance Medicaid Corrections Transportation Other**
Virginia 16.0% 13.1% 0.4% 16.2% 2.9% 11.3% 40.1%
Kentucky 19.8% 25.7% 0.9% 22.5% 2.4% 8.9% 19.8%
North Carolina 23.2% 9.0% 0.5% 24.7% 4.2% 9.9% 28.4%
Tennessee 17.7% 12.8% 0.4% 30.7% 2.7% 6.4% 29.3%
West Virginia 10.8% 14.1% 0.7% 12.7% 1.0% 5.8% 54.9%
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."[7]

Expenditure trends

From 2008 to 2012, expenditures on higher education and Medicaid increased by 0.2 percentage points, a 1.6 percent increase in the share of the budget, and 1.1 percentage points, a 7.3 percent increase in the share of the budget, respectively. During that same time period, expenditures on elementary and secondary education, corrections and transportation decreased. The table below details changes in expenditures from 2008 to 2012.[7][9][10][11][12] Figures are rendered as percents, indicating the share of the total budget spent per category.

Expenditures from 2008 to 2012 (as percents)
Year Elementary and secondary ed. Higher ed. Public assistance Medicaid Corrections Transportation Other**
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%
2008 19.3% 12.9% 0.4% 15.1% 4.2% 12.1% 36.0%
Change in % -3.30% 0.20% 0% 1.10% -1.30% -0.80% 4.10%
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."[7]

Revenues

2013 revenues

Breakdown of general fund revenue sources in FY 2013.
Source: National Association of State Budget Officers

The table below breaks down general fund revenues by source in fiscal year 2013 (comparable figures from surrounding states are also provided to give additional context).[7] Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.

Revenue sources in the general fund, FY 2013 ($ in millions)[7]
State Sales tax Personal income tax Corporate income tax Gaming tax Other taxes and fees Total Per capita revenue**
Virginia $3,249 $11,093 $821 $0 $1,259 $16,421 $1,987.92
Kentucky $3,022 $3,723 $401 $0 $2,202 $9,348 $2,126.82
North Carolina $5,309 $10,958 $1,192 $0 $3,100 $20,559 $2,087.62
Tennessee $6,643 $126 $1,083 $0 $3,551 $11,403 $1,755.39
West Virginia $1,197 $1,722 $249 $0 $982 $4,150 $2,238.04
**Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates for 2013.[8]
Source: National Association of State Budget Officers

Revenue trends

The table below details the change in revenue sources in the general fund from 2009 to 2013.[7][9] Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.

Revenue sources in the general fund, Virginia ($ in millions)[7][9]
Year Sales tax Personal income tax Corporate income tax Gaming tax Other taxes and fees Total Per capita revenue**
2013 $3,249 $11,093 $821 $0 $1,259 $16,421 $1,987.92
2012 $3,122 $10,613 $860 $0 $1,253 $15,847 $1,935.72
2011 $3,012 $9,944 $822 $0 $1,261 $15,039 $1,855.33
2010 $3,083 $9,088 $807 $0 $1,243 $14,220 $1,772.09
2009 $2,903 $9,481 $648 $0 $1,283 $14,315 $1,816.03
Change in % 11.92% 17.00% 26.70% N/A -1.87% 14.71% 9.47%
**Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates.[8][13]
Source: National Association of State Budget Officers

State budgets by year

DocumentIcon.jpg See budget bill: 2014 Executive Budget Document

Fiscal year 2014

Governor Terry McAuliffe released his proposed budget for the 2014-2016 biennium on December 16, 2013. The budget proposed an operating budget of $47.5 billion for FY 2015 and $48.4 billion for FY 2016. Both years spent over $17 billion on education and over $13 billion on health and human resources.[14]

Fiscal year 2013

See also: Virginia state budget (2013-2014)

Fiscal year 2012

See also: Virginia state budget (2011-2012)

Fiscal year 2011

See also: Virginia state budget (2010-2011)

Fiscal year 2010

See also: Virginia state budget (2009-2010)

Historical spending

State budget historical spending below was compiled by the National Association of State Budget Officers. Figures reflect the reported "Total Expenditures" in Table 1. Figures for all columns are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000).[7][10]

Historical state budget spending in Virginia ($ in millions)
Fiscal year General Fund Other funds Federal funds Bonds Budget totals
Total % of Budget Total % of Budget Total % of Budget Total % of Budget
2011-2012 $16,986 39.1% $15,943 36.7% $9,212 21.2% $1,284 3% $43,425
2010-2011 $16,435 38.7% $14,839 34.9% $9,832 23.2% $1,364 3.2% $42,470
2009-2010 $14,989 36.8% $15,001 36.8% $9,328 22.9% $1,456 3.6% $40,774
Averages: $16,136.67 38% $15,261 36% $9,457.33 22% $1,368 3% $42,223
General Fund: The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state.
Other funds: Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds.
Federal funds: Funds received directly from the federal government.
Bonds: Expenditures from the sale of bonds, generally for capital projects.

State debt

According to a January 2014 report by the nonprofit organization State Budget Solutions, Virginia had a state debt of over $91 billion. Its state debt per capita was $11,158. The report revealed that state governments faced a combined $5.1 trillion in debt, 33 percent of annual gross state product. The obligation amounts to $16,178 per capita in the nation. A bulk of the state debt -- 79 percent -- was linked to unfunded public pensions.[15][16]

Total state debt in Virginia[17]
Type Totals U.S. rank
Total state debt $91,339,102,000 15
Per capita debt $11,158 41
State and other fund expenditures $32,929,000,000 40

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 precent funding level experts recommend. Consequently, Pew designated the state's pension system as cause for "serious concern."[18]

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

States sometimes sell general obligation bonds to investors in order to finance large-scale undertakings (e.g., road construction and other public works projects). Credit rating agencies, such as Standard and Poor's, assign grades to states, evaluating their ability to pay the principal and interest on such bonds. Standard and Poor's grades range from AAA, the highest available, to BBB, the lowest. Generally speaking, a higher credit rating indicates lower risk for an investor, which in turn lowers costs for taxpayers.[19]

The table below lists the Standard and Poor's credit rating for Virginia from 2001 to 2012 (grades from surrounding states are provided for additional context).[19]

S&P credit ratings from 2001 to 2012
Virginia Kentucky North Carolina Tennessee West Virginia
2012 AAA AA- AAA AA+ AA
2011 AAA AA- AAA AA+ AA
2010 AAA AA- AAA AA+ AA
2009 AAA AA- AAA AA+ AA
2008 AAA AA- AAA AA+ AA-
2007 AAA AA- AAA AA+ AA-
2006 AAA AA- AAA AA+ AA-
2005 AAA AA- AAA AA AA-
2004 AAA AA- AAA AA AA-
2003 AAA AA- AAA AA AA-
2002 AAA AA- AAA AA AA-
2001 AAA AA AAA AA AA-

Federal aid to state budget

See also: Federal aid to budgets in the 50 states

The chart below notes how much of the state’s general revenues come from the federal government. Figures were calculated by dividing each state’s federal intergovernmental revenue into its general revenue. The number in the rightmost column indicates the state's ranking in relation to the rest of the nation (e.g., if "1," the state receives the highest percentage of federal funding in the nation). Figures from neighboring states are included to provide additional context.[20]

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.[20]

Federal aid to state budgets in 2012
State Federal aid as % of general revenue Total federal aid National rank
Virginia 23.53% $9,278,113,000 48
Kentucky 35.69% $8,056,691,000 14
North Carolina 33.24% $15,192,577,000 26
Tennessee 41.02% $11,198,575,000 3
West Virginia 34.71% $4,267,399,000 19

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.[21]

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.[22]

Budget transparency

Transparency evaluation
Commonwealth Data Point
Searchability Y
600px-Yes check.png
Grants N
600px-Red x.png
Contracts N
600px-Red x.png
Line item expenditures Y
600px-Yes check.png
Dept./agency budgets Y
600px-Yes check.png
Public employee salaries N
600px-Red x.png
Last evaluated in 2009.
See also: Evaluation of Virginia state website and Constitutional provisions regarding reading of bills

Virginia has partial spending transparency through its website Open.Virginia.gov, which includes Commonwealth Data Point. However, as noted in the chart to the right, Virginia's database falls short of certain transparency standards. One shortcoming is that Commonwealth Data Point does not provide any means of viewing state contracts or grants. While line item expenditures are provided, a 2009 article wrote that "extracting usable information from the site isn't easy." Data Point records individual transactions, but with very little if any data, explaining why the state spent the funds."[23]

Transparency legislation

In 2009 there were two transparency bills pending in the Virginia General Assembly: Senate Bill 936 and House Bill 2285. SB 936 provided for the Virginia Enterprise Applications Program (VEAP) within the Office of the Secretary of Technology to create and maintain a searchable database website that would contain information on state revenues, appropriations, and expenditures.[24] HB 2285 mandated the creation of a comprehensive, searchable database of Virginia government spending, easily accessible to members of the Commonwealth.

On February 25, 2009, both Virginia Senate Bill 936 and HB 2285 were passed unanimously.[25]

In August of 2010, Virginia launched ARRA Virginia to show how the state's $5.5 billion in stimulus dollars were being spent.[26]

Multi-measure budget transparency profile

The Institute of Government and Public Affairs at the University of Illinois created a multi-measure transparency profile for Virginia, which measured state transparency as of September 2011 using indicators from a range of organizations. These indicators measured both website transparency and other recognized facets of governmental transparency. In addition, IGPA presented four unique indicators of non-transparency based on the observation that transfers or reassignments between general and special funds can obscure the true fiscal condition of a state.[27][28]

IGPA devised a budget transparency index based on information available from the National Association of State Budget Officers. Virginia tied for 33rd in the nation with 12 other states, earning four out of eight possible points.[28]

Virginia - IGPA score for budget process, contents and disclosure
Budget transparency indicator Yes or no?
Performance measures
{{{1}}}
"Generally Accepted Accounting Principles" budget N
600px-Red x.png
Multi-year forecasting
{{{1}}}
Annual cycle
{{{1}}}
Binding revenue forecast N
600px-Red x.png
Legislative revenue forecast
{{{1}}}
Nonpartisan staff N
600px-Red x.png
Constitution or statutory tax/spend limitations N
600px-Red x.png
TOTAL 4

In addition to the individual state profile, IGPA offers a 50-state comparison and profiles for other states.[28]

U.S. PIRG "Following the Money" report

See also: Following the Money 2014 Report

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.[29] 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.[29]

Accounting principles

See also: Virginia government accounting principles

The Virginia Auditor of Public Accounts is an independent auditor serving the Commonwealth of Virginia. The Auditor of Public Accounts is part of the legislative branch of the Virginia government and reports through the Joint Legislative Audit and Review Commission (JLARC) of the Virginia General Assembly. This structure provides independence from the executive and judicial branch agencies the auditor must audit. Article IV Section 18 of the Virginia Constitution established the Auditor of Public Accounts and Code of Virginia §30-130 through §30-142 sets forth the requirements of the office.[30]

The Institute for Truth in Accounting (IFTA) rates Virginia “timely” in filing the state’s Comprehensive Annual Financial Report (CAFR) – the annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and six states as worst. IFTA does not consider Virginia's CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis does not include significant liabilities for the pension plans and for other post employment benefits, such as health care.[31] Virginia's CAFRs are publications of the The Virginia Department of Accounts in accordance with Section 2.2-813 of the Code of Virginia. The Department, under the direction of the Virginia Comptroller, is responsible for:[32]

  • Providing a unified financial accounting and control system for state funds
  • Developing a comprehensive system of checks and balances between state agencies entrusted with the collection, receipt and disbursement of state revenues
  • Maintaining a central accounting system for all state agencies and institutions.

Contact information

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

See also

External links

Additional reading

References

  1. Refers to General Fund spending. Typically in state budgets the General Fund is spending that is most directly controlled by state legislators.
  2. This figure is derived by calculating the percent difference between the prior two years' spending levels according to the National Association of State Budget Officers.
  3. Bureau of Labor Statistics, "CPI Detailed Report Data for February 2014," accessed April 9, 2014
  4. InflationData.com, "Cumulative Inflation Calculator," February 28, 2014
  5. National Conference of State Legislatures, "State Experiences with Annual and Biennial Budgeting," updated April 2011
  6. 6.0 6.1 6.2 National Association of State Budget Officers, "Budget Processes in the States, Summer 2008," accessed February 21, 2014
  7. 7.00 7.01 7.02 7.03 7.04 7.05 7.06 7.07 7.08 7.09 7.10 7.11 7.12 7.13 7.14 7.15 National Association of State Budget Officers "State Expenditure Report, 2011-2013," accessed February 21, 2014
  8. 8.0 8.1 8.2 United States Census Bureau, "Annual Estimates of the Resident Population: April 1, 2010 to July 1, 2013," accessed February 26, 2014
  9. 9.0 9.1 9.2 National Association of State Budget Officers, "State Expenditure Report, 2009-2011," accessed February 24, 2014
  10. 10.0 10.1 National Association of State Budget Officers, "State Expenditures Report, 2010-2012," accessed February 24, 2014
  11. National Association of State Budget Officers, "State Expenditure Report, 2009," accessed February 24, 2014
  12. National Association of State Budget Officers, "State Expenditure Report, 2008," accessed February 24, 2014
  13. United States Census Bureau, "Vintage 2009: Annual Population Estimates," accessed February 26, 2014
  14. 2014 Executive Budget Document, "Governor McDonnell's Proposed Budget for the 2014-2016 Biennum," December 16, 2013
  15. State Budget Solutions, "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  16. Washington Examiner, "EXography: Unfunded public employee pensions drive state debts skyward," January 21, 2014
  17. State Budget Solutions "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  18. Pew Center on the States, "Widening Gap Update: Virginia," June 18, 2012
  19. 19.0 19.1 Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2012," July 13, 2012
  20. 20.0 20.1 United States Census Bureau, "State Government Finances: 2012," accessed February 24, 2014
  21. Recovery.gov, "Stimulus Spending by State," accessed February 21, 2014
  22. Federal Fund Information for States, “ARRA FMAP Extension & Education Jobs Fund Totals,” August 11, 2010
  23. Northern Virginia Daily, "Bill would make state spending transparent," January 20, 2009
  24. Virginia General Assembly Legislative Tracking, "SB 936 Auditor of Public Accounts," 2009
  25. Tertium Quids, "Transparency Bills Pass Senate, House," February 25, 2009
  26. Watchdog, "VA Governor McDonnell launches new stimulus website," August 24, 2010
  27. Institute of Government and Public Affairs at University of Illinois, "Home page," accessed February 21, 2014
  28. 28.0 28.1 28.2 Institute of Government and Public Affairs at University of Illinois, "Budget Transparency Profiles - All 50 States," September 2011
  29. 29.0 29.1 U.S. Public Interest Research Group, "Following the Money 2014 Report," accessed April 15, 2014
  30. Virginia Auditor of Public Accounts Web site, accessed November 17, 2009
  31. Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
  32. Virginia Department of Accounts Website, accessed November 17, 2009