Virginia state budget (2013-2014)

Note: This article was last updated in 2013. Click here for more recent information on state budgets and finances.

The $85 billion budget became law on June 11, 2012.

FY 2014 Review

After the Virginia General Assembly reconvened in January 2013, Virginia's FY 2013-14 state budget was reviewed and modified, as is custom. Governor Bob McDonnell told state agency heads to ready plans to cut four percent from their budgets as a contingency against the "fiscal cliff" and rising health care costs.

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 debated the budget March 2 and sent it to the Senate on March 5, 2012.

Senate Democrats rejected the chamber's proposed budget on February 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 Finance Committee. The budget needed 21 votes to pass, but was defeated 20-17, with three Democrats not voting.

The Senate deadlocked again on February 28, 2012 when voting to approve the biennial budget bill, House Bill 30, short of the needed 21 votes with a vote of only 20-19. The Lieutenant Governor, per the state constitution, cannot vote on revenue or appropriation bills. Options remained to introduce a new budget, but senior lawmakers said 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 Senate to allow the legislature to continue consideration of the spending plan in a special session.

Special Session

The General Assembly began a special session on March 21, 2012, with 12 negotiators — Republicans and Democrats, delegates and senators — meeting in 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 restored $1 million to poison-control centers, $455,000 for teen pregnancy prevention across the state, a two percent raise for state employees, and $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 voted on the budget. On April 5, 2012, the committee reached an agreement. It did not include the $300 million for the Metrorail line to Dulles International Airport or the $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 did include $40 million for cost-of-competing funds 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 appropriated $2 million to lure filmmakers to Virginia.

The governor signed the budget on June 11, 2012 after vetoing one amendment to the budget that would have prohibited him from using future surpluses for transportation maintenance. The governor marked another amendment, one that required 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 would not enforce it.

Governor's Proposed Budget

Gov. McDonnell's proposed state budget for FY 2013-2014 can be found here.

All together, the spending plan totaled $85 billion. It did not include tax increases but did include $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, totaled $34.5 billion, approximately the same as FY 2008.

Spending increases included:

• $2.2 billion previously announced boost in employer contributions to the underfunded Virginia Retirement System, about half of which came 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, with much of that support going to math, science, engineering, technology and healthcare curricula at colleges where state support declined over the years,
• $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 did 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 FY 2013-14 equal to two, four and six percent of their 2012-2014 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 billion proposed pension payment falls $600 million short of what state retirement officials say is needed to address a multi-billion hole. The governor assumed higher stock market gains than the pension professionals.