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Virginia Politics
Posted at 12:47 PM ET, 08/10/2011

McDonnell: Virginia’s budget surplus will increase by at least $50M

Gov. Bob McDonnell (R) said Wednesday that he will announce next week that Virginia’s budget surplus will increase by at least another $50 million because of savings.

“We saved a lot of money,’’ McDonnell said. “I gave some incentives to people, as you remember, to come up with new ideas and I told my managers don’t be like Washington, don’t spend every dime you have and then think that’s what you’re going to get in the base budget next year, not happening.”

Last month, McDonnell announced that the state had finished its fiscal year with a surplus of $311 million -- its second straight year with higher-than-expected revenue.

McDonnell will unveil the final numbers in his speech to the General Assembly’s money committees next Thursday in Richmond.

A year ago, Virginia ended the fiscal year with a surplus of about $403.2 million — $229 million came from taxes, and the rest from savings.

The governor credited higher tax revenue — 5.8 percent growth in fiscal year 2011, instead of a forecast 3.5 percent — as the main reason for the surplus. It is the first year since 2008 that state revenue has increased over the previous year.

He has proposed giving some of the unspent balance to sheriff’s offices across the state and to localities hit by recent tornadoes in southwest Virginia, as well as shoring up the pension system.

But 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.

Democrats have criticized McDonnell for declaring a surplus after years of cuts to core services; delayed payments to the Virginia Retirement System; and a requirement that retailers pay sales tax a month early, allowing the state to receive money in an earlier fiscal year.

The General Assembly passed a $78 billion budget for fiscal 2011 and 2012 with no general tax increase, but the budget did include several fees and hundreds of millions of dollars in cuts, including to health care, schools and public safety, as it tried to close a $4 billion shortfall over the two years.

By  |  12:47 PM ET, 08/10/2011

 
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