Virginia state budget
- 1 Federal Aid to State Budget
- 2 Fiscal Years 2013-14 Biennial State Budget
- 3 Fiscal Years 2011-12 Biennial State Budget
- 4 Budget transparency
- 5 Budget background
- 6 Accounting principles
- 7 Stimulus
- 8 Public Employees
- 9 External links
- 10 References
|Virginia state budget|
|Date signed:||May 16, 2012|
|Other state budgets|
Virginia lawmakers approved the $85 billion budget for FY2013-14 on April 18, 2012, one month late. The budget provides additional funding for public schools, hospitals and nursing homes than the original proposal, but it did not include additional funding for an extension of Metrorail to Dulles International Airport.
The state operates on a biennial budget cycle, which currently encompasses FY2013 and FY2014. The fiscal year begins on July 1.
In FY 2012 Virginia had a total state debt of approximately $64,314,401,000 when calculated by adding the total of outstanding official debt, pension and other post-employment benefits (OPEB) liabilities, Unemployment Trust Fund loans, and the budget gap. The FY2013 state debt is down slightly from the prior year's total of approximately $65,105,037,000.
Virginia's total state debt per capita is $7,943.38.
Federal Aid to State Budget
The chart below represents how much of the state’s budget comes from the federal government. The number is the corresponding ranking in relation to the rest of the nation (if #1, the state receives the highest percentage of federal funding in the nation):
|Virginia||20.5% (#46)||22.9% (#49)||26.35% (#50)||26.82% (#47)|
- Figures were calculated by dividing each state’s intergovernmental revenue into its general revenue.
Fiscal Years 2013-14 Biennial State Budget
The $85 billion budget became law on June 11, 2012.
After the General Assembly reconvenes in January, Virginia's FY2013-14 state budget will be reviewed and modified, as is custom. Gov. Bob McDonnell told state agency heads to ready plans to cut 4 percent from their budgets as a contingency against the "fiscal cliff" and rising health care costs.
The General Assembly began the special session on March 21, 2012, with 12 negotiators — Republicans and Democrats, delegates and senators — meeting Richmond to try to draft the $85 billion biennial budget. The two parties reached a deal on the second day of the special session. Republicans and Democrats agreed to move $60 million to schools, Medicare and toll relief, which were priorities for Democrats. The deal included plans to borrow $300 million for the Metro-to-Dulles rail project. The budget also restores $1 million to poison-control centers, $455,000 for teen pregnancy prevention across the state, a 2 percent raise for state employees, and it restores $500,000 in funding that had been cut to public broadcasting..
On March 22, 2012, the Senate Finance Committee approved the $85 billion plan and sent it to the full Senate for consideration. The full Senate approved the budget with a vote of 35-4 on March 26, 2012.
A conference committee convened to hammer out the differences between the Senate and House budgets, and then all 140 legislators will vote on the budget. On April 5, 2012, the committee reached an agreement. It does not include the $300 million for the Metrorail line to Dulles International Airport as well as $125 million in toll relief for Hampton Roads that the Senate had sought. The governor had opposed the additional funds for rail to Dulles. The negotiated budget also included $40 million in the budget for cost-of-competing fund to help Northern Virginia schools attract staff in an expensive market, with $28 million of that devoted to the first year; the Senate had sought $60 million.
The Senate initially rejected the conference committee's bill on April 17, 2012. The following day, Sen. Charles Colgan, a Democrat broke ranks and voted with Republicans. The Senate approved the budget by a vote of 21-19 on April 18, 2012.
The governor proposed 100 amendments to the budget agreement, 72 of which the legislature approved on May 13, 2012 The legislature rejected those amendments considered most "key" to the governor's plan, including one permitting the governor to divert surplus general funds for transportation. Lawmakers did approve the governor's amendment that appropriates $2 million to lure filmmakers to Virginia.
The governor signed the budget on June 11, 2012. The governor vetoed one amendment to the budget that would have prohibited him from using future surpluses for transportation maintenance. The governor marked another amendment, one that requires a commission made up of legislators to approve disbursements from a new fund set up as a hedge against declining federal support, as “unconstitutional,” meaning the executive branch won’t enforce it.
Legislative Proposed Budget
On March 1, 2012, the House of Delegates introduced its third version of the state's $85 billion biennial budget after the Senate failed to approve its first two attempts. The chamber permitted the budget to be re-introduced by unanimous consent. The full House is to debate the budget March 2 and it would head to the Senate on March 5, 2012.
Democrats in the Virginia Senate's $85 billion biennial state budget rejected the proposed budget on Feb. 23, 2012, after they were rebuffed in their bid for a share of power in the evenly divided chamber. Democrats had sought more seats on committees and co-chairmanship of the powerful Finance Committee. The budget needed 21 votes to pass, but was defeated 20-17, with 3 Democrats not voting.
The Senate deadlocked on Feb. 28, 2012 when Senate voted to approve the biennial budget bill, House Bill 30, with a vote of only 20-19. Twenty-one votes are needed for approval, and the Lieutenant Governor per the state constitution cannot vote on revenue or appropriation bills. Options remain for introducing a new budget, but senior lawmakers say it would be futile without a truce between Senate Democrats and Republicans.
On March 9, 2012, the day before the regular legislative session was scheduled to adjourn, lawmakers voted unanimously in both the House of Delegates and Virginia Senate to allow the legislature to continue consideration of the spending plan in a special session. A conference committee reached an agreement on April 5, 2012. The Senate approved the budget on April 18, 2012 by a vote of 21-19.
Governor's Proposed Budget
Gov. Bob McDonnell's proposed state budget for FY2013-14 can be found online.. All together, the spending plan totals $85 billion. It does not include tax increases but includes a $10 million in fee hikes for Department of Motor Vehicle services. The general fund from state taxes spent on core services such as public safety, health care and public schools totals $34.5 billion, approximately the same as FY2008.
Spending increases include:
- $2.2 billion previously announced boost in employer contributions to the underfunded Virginia Retirement System, about half of which comes from city and county governments,
- $650 million for increased use of Medicaid,
- $438 million net increase for public education, most of it to meet revised minimum curriculum benchmarks under state law including classroom staffing ratios and teacher salaries,
- $230 million previously announced for higher education to offset rising tuition rates, and much of that support to math, science, engineering, technology and healthcare curricula at colleges where state support declined over the years. That commitment follows passage this year of higher education reform legislation backed by the administration,
- $100 million for economic development, including about $60 million for commitments already made to businesses in years past and $40 million for new, ongoing efforts to recruit business,
- $30 million for more community-based mental health care.
The governor made nearly $900 million in spending cuts and found savings for the budget, including:
- $258.6 million saved by not funding inflation costs for hospital rates under Medicaid,
- $65 million from not allowing Medicaid inflation increases for nursing homes,
- $109 million from eliminating the allowance for inflation growth in non-classroom public school support services,
- $108 million in expiring federal stimulus money for public schools that the state will not replace,
- $81 million saved by limiting Virginia Preschool Initiative,
- $65 million cut from the state stipend that helped school districts retain non-instructional support and administrative employees from poaching by rival school systems,
- $29.9 million continues reductions for indigent care at state-supported teaching hospitals,
- $18.2 million cut in the Department of Medical Assistance Services by lowering income limits for eligibility for long-term care.
The governor also offered an investor tax credit to provide working capital to small businesses.
Gov. McDonnell asked state agency heads to suggest cuts for FY2013-14 equal to two, four and six percent of their 2012-14 general fund appropriation. The governor told the heads of the agencies, "Do not hesitate to suggest program or service eliminations even if they are required by current state law."
The governor's $2.2 proposed pension payment falls $600 million short of what state retirement officials say is needed to address a multi-billion hole. The governor assume higher stock market gains than the pension professionals
Fiscal Years 2011-12 Biennial State Budget
The state finished FY2012 with a surplus of $448.5 million as the result of both higher-than-anticipated revenues and a reduction in spending by agencies. The governor said he would use the surplus money to give state employees a 3 percent bonus to state workers who have not had a pay raise in five years.
In August 2011, Gov. McDonnell announced that the state ended FY2011 with a surplus of $544.8 million. The governor had original said that the state had a surplus of around $310 million, but in a speech to legislators he said his administration had saved an additional $234 million. Virginia law calls for the bulk of the money to be put into the state’s rainy day fund and spent on K-12 education, transportation and Chesapeake Bay cleanup. The surplus announcement, however, did not mention that the commonwealth still needs to pay back the money it borrowed from the retirement fund for state workers or that the state had not repaid half a billion that it borrowed from the federal government for unemployment insurance.
Income taxes constitute two-thirds of Virginia’s total general revenues.
Budget Amendments for FY2012
In Jan. 2011 when the legislature reconvened, the General Assembly made changes to the state's two-year budget. The governor signed the resulting "caboose budget" on May 25, 2012. The caboose budgetl completes the transfer of $67.2 million from FY2011's budget surplus to transportation, adds $5.8 million for per diem payments to local and regional jails, and restores $10 million that had been cut from state college budgets. Overall, the governor proposes cutting $2 million in FY2012 and $2 million in FY2013. His amendments to the budget are outlined in this document form the Governor's office.
Some of the cuts and savings include:
- $92 million in savings in K-12 education
- $5.4 million in savings at the Lottery
- $5 million in cuts for programs to help at-risk youth and families through the Comprehensives Services Act
- $32,000 for the State Fair
- $420,000 by eliminating four vacant positions in the Department of Forestry
- $1.4 million by continuing agency-wide restrictions in the Department of Health on discretionary spending, travel and hiring
- $1 million in administrative savings at the Department of Social Services
- ending state taxpayer funding of public broadcasting in Virginia.
The cuts are seen as offsetting the governors proposed spending for $150 million on roads and bridges, $54 million for economic development, and $58 million in colleges and universities. McDonnell also wants to spend approximately $30 million for behavioral health and developmental services and $39 million for the environment, including nearly $33 million to clean up the Chesapeake Bay.
The governor also increased the state's revenue forecast by $283 million -- $134 million in FY2011 and $149 million in FY2012. His proposal also included $1 million to promote OpSail 2012, a tourist event that will bring tall sailing ships to ports to commemorate the War of 1812, a $500,000 grant to help fund a new headquarters for Operation Smile and another $500,000 for Virginia's food banks.
Original FY2011-12 State Budget
A two-year budget for FY 2011 and 2012 was drafted when the Virginia General Assembly convened January 13, 2010 and adopted that spring. Gov. McDonnell proposed 14 amendments to the bill amending the current year's budget and 96 amendments to the FY 2012 budget. The Republican-controlled House of Delegates rejected nine amendments and the Democrat-controlled state Senate rejected an additional six of the governor's proposals. In addition to some technical and language changes, McDonnell's successful amendments to the FY2011 and 2012 budget included:
- Adding $6 million to the Governor's Development Opportunity Fund, for a total of $36.8 million available for business incentives.
- Restoring $528,313 in funds for the Virginia Economic Development Partnership
- Anticipating an additional $3.6 million in funding from increased speeding ticket fines
- Allowing for an additional $1.8 million reduction in support for local social service departments.
The General Assembly rejected a 33% reduction in public television and radio funding in 2012. The stations will still receive a 15 percent funding reduction, as approved in the Legislature's originally passed budget.
Gov. McDonnell said in Oct. 2010 that his amendments to the final year of the FY2011-12 budget would not include pay raises for state workers. State workers are due to receive a 3 percent bonus in FY2011; the last time they received a raise was 2007.
Virginia currently has partial spending transparency through its website, Open.Virginia.gov, which includes Commonwealth Data Point. However, as noted in the chart below, Virginia's database falls short of certain transparency standards.
The following table is helpful in evaluating the level of transparency provided by a state spending and transparency database:
|State Database||Searchability||Grants||Contracts||Line Item Expenditures||Dept/Agency Budgets||Public Employee Salary|
|Commonwealth Data Point|
- 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."
In 2009 there were two transparency bills pending in the Virginia General Assembly: Virginia Senate Bill 936 and Virginia House Bill 2285. SB 936 "Provides for the Virginia Enterprise Applications Program (VEAP) within the Office of the Secretary of Technology to create and maintain a searchable database website containing information on state revenues, appropriations, and expenditures." HB 2285 mandates creation of a comprehensive, searchable database of Virginia government spending, easily accessible to members of the Commonwealth.
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 measures state transparency as of September 2011 using indicators from a range of organizations. These indicators measure both website transparency and other recognized facets of governmental transparency. In addition, IGPA presents 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.
- Virginia has operated under a biennial system since the Constitution of 1851 provided for biennial Sessions.
- In 1870, the Constitution was amended to require annual sessions, only to have biennial sessions restored in 1876.
- In 1976, the Commission on State Governmental Management voted on a study of the structure and processes of state government. Their findings caused them to reject (14 to 1) proposed legislation to remove the biennial process due to the fact that "the budget formulation process has been compacted into too short a times period in the past resulting in an inability of executive branch management to undertake the in-depth analysis necessary to focus on alternative solutions to the problems facing the state."
The Budget Process
- The biennial budget is enacted into law in even-numbered years, and amendments to it are enacted in odd-numbered years.
- Agencies evaluate and estimate their future costs and submit a potential budget to the Department of Planning and Budget(DBP).
- The DBP analyzes the various agency requests, and then pass along the resulting findings to the governor for him and his cabinet to prepare the proposed state budget for the General Assembly's approval.
- The General Assembly convenes each year on the second Wednesday of January, where the Governor's prepared budget is presented in the form of a bill.
- After being reviewed by committees in both the state House and Senates, amendments are added and voted on in each chamber.
- Each house sends their version of the amended budget bill to the other for consideration and another vote.
- A conference committee resolves any differences between the two versions of the bill, and sends the resulting single version to the Governor for his signature.
- The Governor reviews the bill passed by the General Assembly, and may either sign it, veto it entirely, or use the power of the 'line-item veto,' or recommend further amendments.
- If the Governor vetoes the bill, or any item on it, it is sent back to the General Assembly during the spring session.
- The final passed budget is then enacted into law and goes into effect on July 1 in even-numbered years and on the date of passage in odd-numbered years.
The Virginia Auditor of Public Accounts is the independent auditor serving the Commonwealth of Virginia. The Auditor of Public Accounts is part of the legislative branch of Virginia government and reports through the Joint Legislative Audit and Review Commission (JLARC) of the General Assembly. This structure provides independence from the executive and judicial branch agencies we audit. Article IV Section 18 of the Constitution of Virginia established the Auditor of Public Accounts and Code of Virginia §30-130 through §30-142 sets forth the requirements of the Office.
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 6 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. 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 State Comptroller (David A. Von Moll), is responsible for:
- 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.
Virginia received $3.3 billion in federal funding.
The state 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.
According to 2008 Census data, the state of Virginia and local governments in the state employed a total of 526,602 people. Of those employees, 402,487 were full-time employees receiving a net pay of $1,577,251,433 per month and 124,115 were part-time employees paid $131,107,597 per month. More than 59% of those employees, or 312,402 employees, were in education or higher education. Since 2009, the number of local government employees decreased approximately 12,000.
- State Budget Solutions, Virginia
- Model transparency legislation from the American Legislative Exchange Council is available at this link.
- Thomas Jefferson Institute
- Virginia Institute for Public Policy
- Commonweatlh Data Point
- Virginia Department of Planning and Budget
- Virginia General Assembly
- Virginia government spending
- Senator Cuccinelli talks about Virginia's level of transparency. Listen here.
- The Washington Post "Virginia Senate passes two-year budget after Colgan votes with Republicans" April 18, 2012
- National Conference of State Legislatures "State Experiences with Annual and Biennial Budgeting" April 2011
- Budget Solutions "State Budget Solutions' third annual State Debt Report shows total state debt over $4 trillion" Aug. 28, 2012
- State Budget Solutions “Report reveals aggregate state debt exceeds $4 trillion” Oct. 24, 2011
- State Budget Solutions "State debt more than $37,000 per private worker, $13,000 per capita" Oct. 2, 2012
- US Census Federal Aid to State and Local Governments
- Tax Foundation' "Monday Map: Federal Aid to State Budgets. Accessed October 15, 2013
- The Washington Post "As state revenues recover, health costs remain a burden" June 11, 2012
- The Virginian-Pilot "McDonnell calls for state budget cuts, citing 'fiscal cliff'" Nov. 9, 2012
- The Washington Post "Round 2: The showdown over Virginia’s budget" March 21, 2012
- The Washington Post "Virginia state budget standoff ends" March 22, 2012
- The Washington Post "Virginia Senate approves state spending plan" March 26, 2012
- The Washington Post "State budget deal reached in Richmond" April 5, 2012
- The Richmond Times Dispatch "UPDATE: Senate again spurns state budget" April 17, 2012
- The Washington Post "Va. Senate abruptly passes two-year, $85B budget after senior Dem breaks ranks" April 18, 2012
- The Washington Post "Virginia lawmakers reject key budget amendments" May 14, 2012
- The Washington Post "As state revenues recover, health costs remain a burden" June 11, 2012
- The Washington Post "Va. House introduces third state budget" March 1, 2012
- CBS Local "Virginia Senate Rejects State Budget In Partisan Dispute" Feb. 2, 2012
- The Washington Post "Va. Senate deadlocks in partisan dispute, kills last state budget version; finances in limbo" Feb. 29, 2012
- The Richmond Times Dispatch "House, Senate heading to special session on state budget" March 9, 2012
- The Washington Post "Va. Senate abruptly passes two-year, $85B budget after senior Dem breaks ranks" April 18, 2012
- Governor McDonnell's Proposed FY13-14 Budget
- The Virginian-Pilot "Gov. McDonnell calls for nearly $900M in budget cuts" Dec. 19, 2011
- The Washington Post "Key points of Gov. Bob McDonnell’s new Virginia budget for 2012-14" Dec. 19, 2011
- Businessweek "Governors Seeking Jobs Offer Tax Breaks as Budget Woes Ease" Jan. 31, 2012
- The Richmond Times Dispatch "McDonnell warns agencies to prepare for stern budget" Oct. 4, 2011
- Old Dominion Watchdog "VA gov’s pension payout includes $600M deferred" Feb. 2012
- The Washington Post "Virginia surplus will fund bonuses for state workers" Aug. 15, 2012
- The Washington Post "McDonnell announces $544.8 million budget surplus" Aug. 18, 2011
- The Richmond Times Dispatch "State Budget: Surplusterisk II" Sept. 12, 2011
- The Washington Post "What budget crisis? Virginia revenues outpacing 2010 levels, increase 7.8 percent for August" Sept. 15, 2011
- [http://www.roanoke.com/politics/wb/309370 The Roanoke Times "Gov. McDonnell signs 'caboose budget'" May 26, 2012 Gov. McDonnell asked legislators to approve $191 million in cuts and savings to the state budget in his annual speech to the General Assembly's financial committees.