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Governor McDonnell Submits Budget Amendments

Press Release

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Date:
Location: Richmond, VA

Last night, Governor Bob McDonnell submitted his amendments to the budget passed by the General Assembly during the 2012 special session, meeting his agreed-upon seven-day deadline for reviewing the delayed budget bill. The governor sent in $43.9 million in budget amendments prior to the midnight deadline for executive action.

"A Bristol teacher's paycheck, a Hampton deputy sheriff's salary, healthcare for a senior citizen in Fairfax, road projects in Richmond, and the fiscal soundness of the entire Commonwealth-all of these things depend upon the timely passage of a balanced state budget," Governor McDonnell said. "This year's protracted partisan budget battle and the delays caused by political maneuvering by some in the Virginia Senate over committee assignments put at risk local governments' and school systems' abilities to budget in a timely and accurate fashion. That is why I voluntarily agreed with the General Assembly to reduce the typical 30-day budget review period to only seven days from formal receipt of the budget, and why I have made only limited amendments to the budget passed by the General Assembly late last month. This will ensure Virginia has a final budget in time for localities to make fiscally sound decisions. The $43.9 million in amendments to the $85 billion budget I have made are primarily in the areas of education and economic development, with a few exceptions, and ensure the fiscal integrity of our Commonwealth while funding core services. Overall, the General Assembly worked with us to fund nearly all of the core priorities I outlined in the introduced budget in December. We have made the significant budget changes I requested in fixing the pension system to reduce unfunded liabilities, reinvested in higher education to reduce tuition increases, restored K-12 funding with an emphasis on STEM, increased accountability and enacted systematic government reform."

The governor's amendments restore funding to critical job-creation programs, preserve funding for education, provide a private-sector solution to fund a one-time state employee performance bonus in November 2012 and fund a modest pay raise in FY 2014, and at the request of legislative leaders, proposes a budget amendment that would treat General Assembly members and statewide elected officials the same as state employees regarding contributions to their pension plan.

The governor restored $19.5 million in economic development funding from approximately $47 million that was removed by the 2012 General Assembly from requested initiatives and existing funding in the introduced budget. These actions are consistent with the governor's ongoing effort to ensure Virginia has the most pro-business, pro-jobs environment possible to encourage private-sector job creation and to continue the downward push on the 5.6 percent unemployment rate which is the lowest in the southeast.

Speaking about the economic development amendments, the governor said, "I believe strongly that Virginia must invest in attracting and retaining private-sector job creators and capital. Therefore I have restored a significant amount of economic development funding stripped by the General Assembly. This strategic investment in attracting and supporting private-sector job creation is crucial to ensuring that the 250,000 Virginians who are still looking for good-paying jobs to feed their families secure employment in the years ahead."

The governor preserved $880.9 million in new funding for K-12 and higher education funds, bolstering his "Top Jobs" education program. He also proposed an additional $2.7 million in funding to recruit teachers in job-creating STEM-related subjects and to fully fund the pivotal third-grade reading program.

"There is no more important investment we can make than in the education of our future leaders," he said. "Children must have the opportunity to get a world-class, affordable education to prepare them for the in-demand careers of today and tomorrow, regardless of their address or zip code."

The governor provided a mechanism to fund his requested percent performance bonus for state employees in November 2012, relying on savings to be generated by state agencies by the end of FY 2012, and funding for a 2 percent raise for state employees in FY 2014.

"Our state employees have shared in Virginia's sacrifice during the economic downturn," he said, "their hard work, dedication and service to their fellow citizens deserves to be rewarded. That is why I have provided funds for a performance bonus on Nov. 30, 2012 based upon agency's ability to save taxpayer money, and a 2 percent pay increase in FY 2014 for all state employees. We must attract and retain top-level professionals in state government, and keeping public-sector pay competitive is vital to those efforts."

At the request of several General Assembly leaders, the governor also proposed a budget amendment that would treat legislators the same as other state employees regarding contributions to their pension plans. Similar to requirements passed in 2011 for state employees, this amendment would require elected officials to contribute 5 percent of their income toward their Virginia Retirement System pensions, offset by a 5 percent increase in compensation when constitutionally permitted.

To make these additional investments, the governor has proposed to transfer the unused portion of previous debt allocation to new capital projects in the conference report, resulting in a net decrease in total debt authorized. In addition, some anticipated year-end balances and revenues were captured, targeted spending reductions were recognized and adjustments for a revised lottery profits forecast from the State Lottery Board were included. No new taxes or fees were included in the amendments. The governor's recommendations for additional resources and savings totaled $53.8 million, resulting in a net unappropriated balance of $22.0 million to create a solid cash cushion for future contingencies.

The General Assembly will reconvene May 14 to take up the governor's amendments in an effort to get a budget in place in time for localities to complete their fiscal planning for FY 2013, which begins July 1, 2012.

Amendments are scheduled to be posted on Monday in the Legislative Information System, which is managed by the Virginia General Assembly.


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