Virginia state budget (2010-2011)

Note: This article was last updated in 2011. Click here for more recent information on state budgets and finances.

Virginia lawmakers approved a $37.3 billion operating budget for FY2011 and a $37.7 billion operating budget for FY2012.

Virginia announced that the state finished FY2010 with a $403 million surplus. This came after he previously predicted a $4 billion shortfall. The state's Revenue Stabilization Fund shrank from $1.19 billion in 2006 to $295 million in 2010.

Virginia had a total state debt of $22,294,831,033 when calculated by adding the total of outstanding debt, pension and OPEB UAAL’s, unemployment trust funds and the 2010 budget gap as of July 2010.

2011 State spending & deficit in billions

Total spending	Health and HR	Education	Protection	Transport	Commerce	Other
$38.8	$11.3	$14.8	$2.9	$4.1	$1.3	$3.5

2011 Local spending & deficit in billions

Total spending	Pension	Healthcare	Education	Welfare	Protection	Transport	Deficit
$40.3	$0.9	$1.2	$15.7	$2.4	$4.3	$2.4	$47.2

Fiscal Years 2011-12 Biennial State Budget

See also: Archived Virginia state budgets

Budget Amendments for FY2012

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. Overall, the governor proposed cutting $2 million in FY2012 and $2 million in FY2013.The governor also increased the state's revenue forecast by $283 million -- $134 million in FY2011 and $149 million in FY2012.

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 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.

Fiscal Year State Budget FY2009-10

Surplus

Virginia ended FY2010 with a $403 million surplus.

Budget cuts

Richard D. Brown, Virginia Secretary of Finance, provided a presentation to the Virginia General Assembly, Senate Finance, House Appropriations, and House Finance committees with a Review of General Fund Revenues and the Virginia Economy for Fiscal Year 2009 and Interim Economic Outlook and Revenue Forecast for Fiscal Years 2010 through 2012 on August 19, 2009. Secretary of Finance Brown's state report showed in FY 2009:

• Employment dropped 1.4% while the forecast was -0.6%
• Construction/Mining was predicted to go down 3.5%, but actual was -10.1
• Since peaking in the third quarter of 2005, home sales and average sale prices in Virginia had fallen to levels not seen since early 2002
• Growth in total General Fund revenue collections was negative 9.2% instead of the predicted negative 7.3%
• State collections declined an unprecedented eleven consecutive months
• For the second half of fiscal year 2009:
  • Payroll withholding tax collections fell 1.0 percent
  • Individual nonwithholding declined 24.8 percent
  • Individual refunds increased 17.0 percent
  • Sales tax collections declined 5.9 percent
  • Corporate income tax receipts fell 19.0 percent
  • Recordation taxes declined 16.8 percent
• FY 2009 General Fund revenue collections finished $298.8 Million, 2% below forecast at $14.7 billion instead of $15.0 billion
  • The major driver of the fiscal year 2009 revenue shortfall was unexpected growth in individual refunds to the tune of 28.8% more refunds between April and June than in 2008, with June’s total 110.2 percent above the prior year
  • Individual Income Tax refunds exceeded the official estimate by $162.4 million
  • Sales Tax collections were $57.5 Million (1.9%) below the official estimate, declining 5.6%

The August 19, 2009 report also showed for FY 2010 that:

• The first month of July 2009 continued the state revenue decline of 8.1%, 14.7% off from the anticipated 6.6% growth
• Employment and income growth were not expected to reach a low point until fiscal year 2010, compared with fiscal year 2009 in the official forecast
• Total General Fund revenue forecast was revised and reduced by $1.2 billion in August 2009 from $15.262 billion to $14.079 billion declining for the second year in a row at 1.6%

Virginia's Joint Legislative Audit and Review Commission released a report titled Review of State Spending 2009 Update in November of 2009 showing state spending had jumped 28% when adjusted to account for inflation and population growth from FY 2000 to FY 2009. The annual operating budget grew from nearly $21.4 billion for spending during the year that began July 1, 1999, to slightly more than $37 billion for the budget year that ended June 30, 2009. While the general fund budget grew from $11 billion in fiscal 2000 to $16.2 billion in 2009, a 46 percent increase, non-general spending more than doubled over the same time, from $10.3 billion to nearly $20.9 billion.

Budget background

See also: Virginia state budget and finances

• Virginia had 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 had 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 was enacted into law in even-numbered years, and amendments to it were 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 was presented in the form of a bill.
• After being reviewed by committees in both the state House and Senates, amendments were 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 was sent back to the General Assembly during the spring session.
• The final passed budget was 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 2008-2010 Budget The 2008-2010 biennial budget was composed of two types of revenue, the General fund and the Non-General fund.

General Funds General Funds account for 45.3% of the 2008-2010 budget revenue. The revenues collected for the general fund were spent for a large variety of purposes at the discretion of the Governor and other state agencies.

Source of Revenue	Percentage of Overall General Funds Revenue
Sales and Use Tax	19.9%
Individual and Corporate Income Tax	71.5%
Other Taxes	9.8%

Non-General Funds Non-General Funds account for the other 54.7% of the state revenue. These funds were typically earmarked by law for specific uses.

Source of Revenue	Percentage of Overall General Funds Revenue
Federal Grants and Contracts	38.2%
Other Revenues	24.1%
Transportation	13.1%
Institutional Revenue	24.6%

See Virginia state budget (2008-2009) for more information.

Accounting principles

The Virginia Auditor of Public Accounts, Walter J. Kucharski, was the independent auditor serving the Commonwealth of Virginia. The state's audit reports were published on their website. The Auditor of Public Accounts was part of the legislative branch of the Virginia government and reports through the Joint Legislative Audit and Review Commission (JLARC) of the General Assembly. 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.

Virginia's CAFRs were publications of 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), was 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.

Credit Rating	Fitch	Moody's	S&P
Virginia	AAA	Aaa	AAA

See also

• Virginia state budget and finances