RICHMOND, Va. (AP) - Gov. Bob McDonnell is claiming that Virginia state government ended its fiscal year in June with a $448.5 million surplus.
That includes savings from state operations totaling $187 million as of June 30.
The administration had already announced a revenue surplus of $129 million.
Savings were bolstered by an unusually large amount of general fund appropriations from state-supported colleges and universities. Seventy percent of the total savings came from higher education.
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Office of Governor Bob McDonnell PRESS RELEASE
RICHMOND – Governor Bob McDonnell announced today during his annual remarks to the annual meeting of the General Assembly Joint Money Committees that Virginia has posted a total revenue and savings surplus of $448.5 million dollars for FY 2012. The surplus follows the Commonwealth's $544.8 million surplus in FY 2011 and $403.3 million surplus for FY 2010. The total FY 2012 surplus consists of the previously announced revenue surplus of $129.2 million along with $187.0 million in state agency savings and agency balances, and $132.3 million in higher education and other unexpended non-general funds.
The governor's full remarks to the Joint Money Committees can be read here.
Speaking about the surpluses, the governor remarked, "This is the third time that I have appeared before you to review the year-end financial position of the Commonwealth. In these three years, I have now announced revenue surpluses and budget savings totaling nearly $1.4 billion. That's not bad for any state in this economy, and it stands in stark contrast to the difficult economic times facing most other states and our national finances. While we are all, to a great extent, captive to the same domestic and global economic trends, there are many areas that remain within our control. One of those is how we handle our annual state budgets. I am pleased to report today that, through bipartisan cooperation, we have ended the 2012 Fiscal Year with a cumulative surplus of $448.5 million. We have done this by budgeting conservatively, keeping taxes low, reforming how state government works, and investing wisely in core functions of government crucial to private-sector job creation and economic development. Simply put: Over the past 3 years we have brought in more revenue than forecasted, and spent less than budgeted. That is responsible fiscal management. It is the Virginia way and I congratulate all the members of the General Assembly for helping us achieve this positive result for our taxpayers."
For fiscal year 2012, total general fund collections, including revenues and transfers, exceeded the official forecast by $129.2 million. General fund revenues rose 5.4 percent in FY 2012 compared with the budget forecast of 4.5 percent. At the same time, Virginia's efforts to reform state government and make it function more efficiently have also produced savings. The administration directed managers to innovate, be frugal, and not spend all their appropriations at the end of the fiscal year just because they had the money. Thus, on the savings side, there was $319.3 million in unspent general fund appropriations, recoveries and non-general fund balances at the end of June. This compares favorably to the $234.1 million savings at the end of fiscal year 2011.
"Together we are proving that, unlike Washington, we can regularly balance a budget, actually spend less and deliver good customer service for our people," Governor McDonnell said. "The revenue surplus is concrete evidence of the Commonwealth's improving jobs picture and overall economic condition. Virginia's seasonally adjusted unemployment rate has declined from 7.2 percent in February 2010 to 5.7 percent today. That's a drop of over 20 percent. We have the lowest unemployment rate in the Southeast and our lowest in 3 years. While Virginia's unemployment rate stands at 5.7 percent the next closest state in the region to us is Alabama, at 7.8 percent."
The Constitution, the Appropriation Act, and the Code of Virginia specify how most of these additional resources must be assigned. An additional $78.3 million must be set aside for deposit to the Revenue Stabilization Fund for FY 2014 bringing the Rainy Day Fund balance to approximately $689.0 million at the end of the biennium, the highest balance since FY 2008. Another $30.0 million is designated for deposit to the Federal Action Contingency Trust Fund as a reserve to help Virginia mitigate the consequences of potential sequestration and other negative federal actions that could adversely affect Virginia's economy and future revenue collections.
In addition, Virginia will be able to meet several other contingent requirements in statute and in the Appropriation Act. The Commonwealth will return $132.3 million to higher education and non-general fund accounts where it properly belongs. Another $16.9 million will be allocated to the Virginia Water Quality Fund to meet Virginia's obligations under the Watershed Improvement Plan to accelerate efforts to clean up the Chesapeake Bay. Virginia will also return $20.9 million to the Transportation Trust Fund to properly account for transportation's share of the accelerated sales tax collections received in June. An additional $17.2 million will be set aside to cover the state's share of obligations resulting from several natural disasters occurring over the course of FY 2012.
"I am pleased to say that one of the most significant items that we will be able to address as a result of the surplus is the 3 percent performance bonus to state employees payable on Dec. 1 included in the Appropriation Act," the governor added. "In the budget bill I introduced to the 2012 General Assembly, I recommended a bonus of up to 3 percent for state employees if agency savings and unspent appropriations at the end of the fiscal year were sufficient to pay it. My idea was simply to offer state employees a performance bonus if they were able to achieve sufficient savings in their agencies such as those incentives provided by the private sector. Our employees proved the merit of this idea by exhibiting their innovation and frugality while providing good customer service, making this performance bonus a reality. State employees have proven that if given control over earning a bonus, they will rise to the occasion."
'Federal Action Contingency Trust' Fund (FACT Fund): $30 million
Virginia Water Quality Improvement Fund: $16.9 million
Higher Education and Non-General Fund Accounts: Return $132.3 million to where it properly belongs
Accelerated Sales Tax to Transportation Trust Fund: $20.9 million
Natural Disaster Reserve: $17.2 million
State Employee Performance Bonus: $77.2 million (All state employees, except for the governor/lieutenant governor/attorney general and legislators, will receive the 3 percent bonus.)
Office of the Lieutenant Governor PRESS RELEASE
STATEMENT OF LIEUTENANT GOVERNOR BOLLING ON GOVERNOR MCDONNELL'S ADDRESS TO GENERAL ASSEMBLY JOINT MONEY COMMITTEE
RICHMOND – Lieutenant Governor Bill Bolling issued the following statement in response to Governor McDonnell's address to the General Assembly Joint Money Committee this morning:
"I am pleased that Virginia has enjoyed significant budget surpluses during all three years of the McDonnell/Bolling administration. This is a dramatic turnaround in just 2½ years. By focusing on fiscal restraint and economic growth, we have been able to restore the financial foundation of our state and chart a positive course for Virginia's future.
"This year we enjoyed a $129.2 million revenue surplus, and today we announced $187.0 million in state agency savings and agency balances, and $132.3 million in higher education and other unexpended non-general funds for the 2012 fiscal year. This produces a total budget surplus of $448.5 million for the year, and brings the overall budget surpluses produced during our administration to nearly $1.4 billion.
"As a result, we are able to give a one-time 3 percent bonus to state employees. Virginia is fortunate to have a dedicated state workforce and they deserve this bonus in recognition of the service they provide to the citizens of our state.
"Moving forward, we must continue to be conservative with our budgeting and spending decisions. Continued fiscal discipline and a vigilant focus on creating jobs and growing our economy will ensure that the Commonwealth continues this trend of positive economic news in the years to come."