Virginia Posts 0.8% Revenue Increase in December

 (Photo credit: Wikipedia)

RICHMOND - Governor Bob McDonnell announced today that December 2013 revenue collections increased by 0.8 percent from December of 2012. On a year-to-date basis, total revenue collections rose 0.7 percent through December, lagging the annual forecast of 1.7 percent growth. Adjusting for the accelerated sales tax program and the 0.125 percent sales tax transfer required by last session's historic transportation bill, total revenues grew 1.7 percent through December, trailing the adjusted forecast of 2.9 percent growth.

The increase in December revenue was driven by solid growth in collections of individual withholding and nonwitholding partially offset by an increase in refunds and declines in sales, corporate income tax, and recordation taxes.  Individual withholding rose 3.1 percent. Year-to-date collections of individual nonwithholding through the first half of the fiscal year rose by 12.4 percent, well ahead of the annual estimate of a 6.3 percent increase.  At the same time, sales and use taxes, reflecting sales made in November, fell 4.3 percent in December.

Because a number of factors can influence the flow of payments and monthly growth rates this time of year, December and January receipts must be considered together to get a clear picture of revenue growth.

Speaking about the December numbers, Governor McDonnell noted, “Over the last four years we have both projected revenue growth and budgeted conservatively.  In doing so, we have helped put Virginia in a more sound financial position for the future.  Virginia’s economy continues to improve.  Over the last four years we have worked in a bipartisan fashion to put in place policies that strengthen that give our private sector job-creators the tools they need to create jobs and opportunities for all Virginians.  This approach has worked.  Since the beginning of this Administration 177,300 net new jobs have been created.  And, our unemployment rate has fallen two full percentage points, from 7.4% to 5.4%.  I want to commend the great work of Virginia’s first chief jobs creation officer, Lieutenant Governor Bill Bolling, and the members of the General Assembly for putting in place pro-growth policies that have helped the Commonwealth emerge as an economic leader during tough fiscal times.”

The December revenue numbers are available at this link:http://www.finance.virginia.gov/KeyDocuments/RevenueReports/MasterReportsList.cfm

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Governor Bob McDonnell Unveils 2015-2016 Budget

Governor of Virginia Bob McDonnell speaking at CPAC. Please attribute to Gage Skidmore if used elsewhere. (Photo credit: Wikipedia)

RICHMOND- Governor Bob McDonnell unveiled the Commonwealth’s budget for the next two fiscal years in a morning address to the Joint Money Committees of the General Assembly. The budget, totaling approximately $95.9 billion for the biennium (General Fund: $37.7 billion; Non-General Fund: $58.2 billion), continues the governor’s focus on promoting private-sector job creation and growing the Commonwealth’s economy in spite of ongoing fiscal uncertainty at the federal level.

In addressing the Joint Money Committees, the governor remarked, “We have talked many times about the “Virginia Way” by which we govern.  We analyze and debate budget and policy issues passionately but civilly.  Then we find common ground and solve problems.  The Virginia Way is one of sharing credit for getting positive results for the good of our people.  Eight million people are counting on the Virginia Way continuing! 

“This approach is especially important today when my introduced budget is handed off to a governor-elect of a different party.  Accomplishments and progress require statesmanship in both branches of government.  I hope you will find the Virginia Way at work in these budget recommendations.  The major spending recommendations focus on the core public services which lead to prosperity.  They also decrease our reliance on budgetary gimmicks that helped in the past but run counter to structural balance and sound financial judgment.  You will also find a fair amount of embedded caution, given the global economic and national political uncertainty.”

The governor concluded his remarks noting, “Over the past four years we have worked together to put the “Virginia Way” to work in building a “Commonwealth of Opportunity” for all Virginians. With your cooperation, we have gotten very good results for our citizens. Unemployment has fallen from 7.4% to 5.6%. Over 172,000 net new jobs have been created, and we are the country’s most business friendly state! We passed the first long-term transportation funding plan in a generation. Our colleges and universities are more affordable and accessible, and on the way to issuing 100,000 new degrees for Virginia students. We reduced the future liability in our pension system by $9 billion. We’ve brought more innovation, accountability, and choice to our K-12 system and rewarded our excellent, hard-working teachers. We’ve cared for the prisoners, the orphans, the hungry, the mentally ill, and the homeless, as the Scriptures say we must. Today, as I enter my last weeks as governor, I sincerely thank you for your strong partnership, your warm friendship, and your can-do, results-oriented leadership.  By any metric, Virginia is stronger today, and we left the campground better than we found it. Our economy is growing. Our schools, roads, pensions, people, natural resources, and jobs are stronger. Now, as you consider this biennial budget, I ask that you keep this progress going and work with Governor-elect Terry McAuliffe and his team to accomplish even more in the years ahead.”

The governor’s full remarks can be read here.

General Fund revenue growth of 4.2 percent is expected in fiscal year 2015, with growth of 3.9 percent anticipated in fiscal year 2016

Selected Highlights of the Governor's Biennial Budget:

·         Triples the Rainy Day Fund from beginning of governor’s term; Fund will reach $1 billion by 2016

·         Allocates $183.1 million in additional, new higher education funding; Brings new administration investment in Virginia’s colleges and universities to nearly $600 million

·         Provides $38.3 million in new funding for mental health priorities

·         Leaves unappropriated balance of $50.9 Million in general fund to provide for greater budget flexibility and latitude for General Assembly and incoming McAuliffe Administration; Largest unappropriated balance since 1991

·         Identifies $261 million in targeted savings

·         Provides for another performance bonus payment of up to 3% for state employees before Christmas 2014; Bonus contingent upon satisfactory employee performance and savings generated at end of current Fiscal Year equal to twice cost of bonus

·         Includes $582.6 million in increased funding in biennium for K-12 and Pre-K

·         Dedicates $16.2 million to cover biennial cost of providing foster care and adoption payments. Includes 3% increase in foster care payment rates; Beginning in FY 2016, provides funds to expand foster care and adoption subsidies to age 21 for the most vulnerable youth

·         Makes available $6.5 million to address study requirements that must be met to allow additional dredging at Norfolk Harbor, as well as for the deepening of the Elizabeth River channel

·         Supplies additional $1.5 Million for Port of Virginia Economic and Infrastructure Development Zone Grant Fund to encourage private-sector companies to locate along transportation corridors leading to Port

·         Presents additional $196.7 million to fund debt service on all capital projects previously authorized by General Assembly, as well as debt service on select new projects

·         Fully funds pension reform commitment of phasing-in increases to state and teacher retirement contributions to reduce future unfunded liabilities

·         Provides additional $315.3 million for the general fund share of state and teacher pension benefits representing funding at 80 percent of the full pension contribution rates, as well as funding for the 10-year scheduled payback of deferred employee retirement contributions from fiscal years 2011 and 2012.

·         Dedicates $55.3 million To Support Public Safety Efforts; Includes $22.2 million for Sheriffs, Commonwealth's Attorneys, and Circuit Court Clerk Deputies to fund new hires, reduce overcrowding in jails, fund long overdue pay increases, and support other critical operations; Also $21.3 million in additional funding to assist local law enforcement through the "599" program

·         Directs $11 million to the City of Richmond for the development, creation, and enhancement of the Slavery and Freedom Heritage Site

·         Continues governor’s commitment to improving Virginia’s prisoner re-entry process with $2.8 million in new funding to help prisoners successfully rejoin society; additionally appropriates nearly $450,000 for additional staffing to further streamline and expedite the state’s restoration of rights process

·         Ensures $4 million for oyster restoration efforts; $2 million each year of the biennium. Virginia’s recent efforts to revitalize the state’s historic oyster industry have resulted in 2012 seeing the largest harvest in the Commonwealth since 1987; the oyster industry had an economic impact of $42.6 million last year

·         Dedicates over $31 million from the FY2013 budget surplus to the Water Quality Improvement Fund

·         Provides $7.2 million for the AIDS Drug Assistance Program to provide access to life-saving medications for the treatment of HIV and related illnesses for low-income clients

·         Directs $8 million over the biennium to the Virginia Housing Trust Fund, and $500,000 in additional revenue each year to Virginia’s rapid re-housing program, all designed to continue the administration’s homelessness prevention and reduction efforts. Over the last four years, overall homelessness in Virginia has declined by 16%

The full budget document is available here.

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Governor McDonnell’s Biennial Budget to Continue Commitment to Making College More Affordable and Accessible for Virginia Students

English: The state seal of Virginia.  (Photo credit: Wikipedia)

RICHMOND - Continuing his administration’s four-year effort to make college more affordable and accessible for Virginia students, Governor Bob McDonnell announced today that his FY 2015/2016 budget will include $183.1 million over the biennium in new support of Virginia’s colleges and universities. The governor’s proposed new funding will help the Commonwealth achieve the goals of the historic “Top Jobs” legislation (Higher Education Opportunity Act of 2011), put forward by McDonnell, that has the state on the path to generating 100,000 additional degrees and certifications over the next 15 years, is reducing the growth of tuition, and enhancing access to higher education. This legislation has also contributed to the creation of 14,000 new slots for incoming students at Virginia schools, and Virginia has recently seen the lowest average yearly increase in tuition in a decade.

 Speaking about the new funding for higher education, Governor McDonnell said, “I firmly believe that in order to get a good job, you need a good education. Our 2011 ‘Top Jobs’ legislation had one very clear goal: to increase the accessibility and affordability of higher education here in the Commonwealth. That legislation is working. We have already added 14,000 new undergraduate slots for Virginia students.  We have invested over $400 million in higher education and created a new higher education funding formula based on enrollment growth, initiatives, incentives, research, financial aid, productivity, and other critical goals. And we have put the Commonwealth’s universities on a pathway to awarding 100,000 additional degrees and certifications over the next 15 years. However, in order to remain one of the nation’s premier systems of public higher education, we must continue our commitment to higher education in the fiscal year 2015/2016 budget. We have started a process that is working, now we must invest in it, and, by doing so, invest in our students and Virginia’s economic future. That is why I am proposing another $183.1 million for higher education in this budget. Virginia’s future prosperity depends upon our current commitment to today’s higher education system. We are investing in the future, and we are making Virginia a more vibrant, prosperous and competitive Commonwealth.”

The governor’s budget will provide the following funding for higher education:

Approximately $32.4 million will support a variety of higher education-related entities and programs, including:

·         Sufficient funding to raise the Tuition Assistance Grant (TAG) to Virginia residents attending private Virginia colleges and universities from $3,100 to $3,300

·         Nearly $6.1 million in workforce development programs and initiatives through the Virginia Community College System, the Institute for Advanced Learning and Research, New College, the Southern Virginia Higher Education Center, the Roanoke Higher Education Center, and the Southwest Virginia Higher Education Center

·         Support for higher education consortiums such as 4-VA Partnership, Center for Advanced Logistics and Virtual Library of Virginia

·         Funding to allow the Jefferson Lab in Newport News to compete for significant new federal infrastructure investment at Virginia’s particle accelerator facility

Over $150 million will be provided directly to the higher education institutions, consistent with the provisions of the “Top Jobs” Act, with $45 million (30 percent) dedicated to base operations and financial aid, while $105 million (70 percent) is directed towards incentivizing performance.

·         Of the $45 million for base operations and financial aid, $13.5 million is dedicated to base operations and $31.5 million will go to financial aid.  Of the $31.5 million in financial aid, 10 percent will be applied towards graduate financial aid to attract high caliber students to Virginia’s research programs.

·         Of the $105 million given to incentivize performance, $21 million will be provided for enrollment growth, $63 million for incentive funding, and $21 million for research and initiatives in support of the goals of the “Top Jobs” Act.

o   The incentive funding rewards performance of higher education institutions for increasing graduation and retention rates, graduating additional STEM-H students needed to keep our economy competitive, and attracting students of all socio-economic levels to higher education.

o   Also included in the funding for research is $2 million over the biennium for cancer research at Virginia Commonwealth University (VCU); $2 million for cancer research at the University of Virginia (UVA); $3.3 million for brain research at Virginia Tech; $2 million for ultrasound research on movement disorders at UVA; $1.95 million to support the Center for Bioelectrics at Old Dominion University (ODU); and $1.3 million for Parkinson’s Disease research at VCU.

Higher Education Accomplishments During McDonnell Administration

·         Reduced tuition increases at Virginia’s colleges and universities to the lowest average yearly increase in a decade (from nearly 10% average during 2000-2010 to 4% in 2012)

·         Reformed higher education to generate 100,000 new degrees by 2025 focusing on STEM through “Top Jobs of the 21st Century” legislation in 2011; colleges and universities have already enrolled an additional 14,000 in-state undergraduates

·         Invested over $400 million in new money in higher education and created new higher education funding formula based on enrollment growth, initiatives, incentives, research, financial aid, productivity, and other critical goals

·         Implemented and secured funding for Old Dominion University’s MonarchTeach which will afford aspiring STEM teachers an opportunity to engage in clinical/field experience during their first year of college

·         Established the Governor’s Center for Excellence in teaching at George Mason University

·         Established a school and campus safety week to raise awareness and highlight the importance of all-hazards preparedness on school and college campuses

·         Implemented requirement for university specific strategic plans and efficiency goals to reduce overhead

·         Ensured in-state tuition for a larger population family members of active military, and members of the National Guard; including passage of landmark legislation providing in-state tuition to all veterans

·         Expanded non-credit funding in the 2012-14 biennial budget for community college workforce training and services to 9,463 businesses annually

·         Expanded use of higher education equipment trust fund to provide pre-employment and incumbent workforce training through community college and non-credit programs

·         Launched the state’s first workforce development report card that provides state and regional data on outcomes in the areas of STEM-H pipeline development, college and career readiness, secondary and postsecondary credential attainment, employment, and training capacity

·         Expanded the role of the Virginia Workforce Council to advise the governor on leadership and administration of more than 25 career and technical education and workforce programs targeted to Virginians from middle school to retirement age

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Governor McDonnell Continues Commitment to K-12 Education Reform in FY 2015/2016 Budget

Governor of Virginia Bob McDonnell speaking at CPAC. Please attribute to Gage Skidmore if used elsewhere. (Photo credit: Wikipedia)

RICHMOND - Building on his commitment to ensure that every child in Virginia, regardless of their zip code, has access to a top quality education, Governor Bob McDonnell today announced that his FY 2015/2016 budget will include $582.6 million in increased funding for the biennium for K-12 and pre-kindergarten education.  Funding is increased by $268.8 million in FY2015 and $313.8 million in FY2016.  This funding includes $38.0 million in anticipated additional Lottery profits each year, for a total of $76.0 million for the biennium. 

 Speaking about the new funding for K-12 education, Governor McDonnell said, “It has been said that providing high quality schools for all children, and thus greater access to the American Dream, is the civil rights issue of our time.  We have made great strides over the last four years to ensure that all students are able to get a world class education.  This started with increasing educational opportunities through college lab schools, charter schools and virtual schools.  We then focused on raising standards for schools and teachers, reducing mandates on local school divisions, enhancing teacher quality, and worked to end social promotion by providing reading intervention for students in third grade.  This year, we established the Opportunity Educational Institution to focus on turning around chronically failing schools in Virginia.  We implemented A-F school report cards so parents can better understand how their child’s school is doing.  We provided the first pay raise in five years and strategic compensation for teachers, authorized Teach For America in the Commonwealth and reduced red tape for school divisions.  Additionally, over the last four years we have directed more money into the classroom, where instruction occurs.  We are seeing the results of our reforms.  Nearly nine out of 10 ninth graders who entered high school in the fall of 2009 earned a diploma within four years, a 7.8 percent increase since 2008.  The statewide dropout rate fell to 5.9 percent for the class of 2013, compared with 6.5 percent for the class of 2012.  And, reading skills for Virginia’s fourth graders have greatly improved, with 43 percent of fourth graders reading meeting or exceeding the National Center for Education Statistics proficiency standard – almost 10 percent more than the national average.”

 Governor McDonnell continued, “My FY 2015/2016 budget continues our commitment to education reform.  Until every child has access to the high-quality education they deserve, our work is not finished.  That is why I am proposing $582.6 million in new funding over the next biennium for K-12 education.  This amount with targeting toward instruction operations moves Virginia from 61 percent to 64 percent of all education dollars going to the classroom over the past four years – just shy of the goal of 65 percent.  The new money includes $20 million to bolster and protect the Literary Fund for school construction loans so that our schools are equipped with the tools our children need to succeed.  Recognizing that math and reading are critical building blocks to success down the road, we will also invest over $4 million to help schools not meeting accreditation requirements by providing additional math and reading specialists and other professional support.  Finally, we will provide more than $500 million over the next biennium to local school divisions.  This funding provides support for the costs associated with rebenchmarking the Standards of Quality, accounting for the growth in student enrollment and increased teacher retirement costs.”

Specific programs and initiatives supported by this funding include:

·         Direct Aid to local school divisions – $233.2 million in FY 2015 and $282.1 million in FY 2016 is provided for the increased costs of the Standards of Quality and related incentive and categorical education programs.  This amount includes support from the increased Lottery profits of $38.0 million per year.

·         Support for school construction loans - $20.0 million in general fund support is provided over the biennium to replace literary funds used for teacher retirement, which has drawn down assets in the Fund.  The freed-up Literary Fund revenues will be used for its intended purpose of school construction loans in order to support the school renovation and construction needs of school divisions.  In addition, the budget continues the 2013 initiative of $6.0 million per year in authorized debt to provide grants to pay for upgrades to security at schools.

·         Pre-kindergarten programs - $7.4 million over the biennium to continue the state’s support of pre-kindergarten programs and an additional $2.0 million to implement kindergarten readiness assessment programs.

·         Opportunity Educational Institution - $600,000 per year to staff the Institution, whose mission is to help unaccredited schools improve the education provided to its students. 

·         Math and reading specialists - $4.3 million over the biennium to help schools not meeting accreditation requirements by providing additional support for math and reading specialists, as well as professional guidance on how to improve their academic outcomes.

·         Community support - $2.8 million to expand effective and innovative programs such as Communities in Schools, PluggedinVA, GReat Aspirations Scholarship Program, Virginia Center for Excellence in Teaching, and the positive behavioral interventions and supports initiative. 

K-12 Accomplishments During McDonnell Administration

·         In 2010, Governor McDonnell’s “Opportunity to Learn” package was highlighted by measures to facilitate the expansion of high quality charter schools in the Commonwealth, and further utilize and incorporate virtual and college laboratory schools into Virginia’s public school system.

·         Building on his “Opportunity to Learn” education reform initiatives that passed the General Assembly with broad bipartisan support in 2010, Governor McDonnell continued to work to expand educational opportunities for students in every corner of the Commonwealth in 2011.  The initiatives included a proposal to implement a groundbreaking performance pay incentive pilot program that provided competitive grants for school divisions identified as hard-to-staff. The Governor also advanced legislation which established a tax credit for companies donating to nonprofit organizations that provide scholarships to help lower income students attend nonpublic schools. 

·         The governor’s 2012 “Opportunity to Learn” K-12 education reform agenda focused on raising third grade reading standards for children, increasing incentives for schools and teachers, reducing mandates on local school divisions, expanding educational options like tuition tax credits, charter schools, and virtual schools for Virginia students, and funding for critical education and training programs.

·         The game-changing “All Students” 2013 K-12 education reform agenda generated numerous successful bills and policies focusing on increasing teacher pay, improving the ability to reward good teachers and increasing accountability for poor performing teachers, establishing the Governor's Center for Excellence in Teaching and the Governor's Academies for Excellent Teaching, creating a Teacher Cabinet, bringing Teach for America to the Commonwealth, creating transparent school report cards to provide parents and educators with clear A-F grading measures, reducing red tape for local school divisions, supporting teacher innovation and staffing, guaranteed long-term support for students to achieve key learning milestones in reading and mathematics to strengthen their education, helping students stuck in chronically failing schools by creating a turnaround entity to ensure schools dramatically improve and reach accreditation, providing parents with more public school choice, and continuing to recognize that excellent teaching is key to a great education.

The governor commends House Majority Leader Kirk Cox and former Secretary of Education Jim Dyke and many other legislators and constituent groups for their leadership and hard work in improving public education in Virginia.

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Governor McDonnell Announces $585 Million Budget Surplus for FY 2013

English: The state seal of Virginia. Српски / Srpski: Застава америчке савезне државе Вирџиније. (Photo credit: Wikipedia)

***Fourth Surplus in Four Years of McDonnell Administration***

Total Surpluses During Term Equal Nearly $2 Billion: Largest Ever for Any Administration

In Annual Address to Money Committees, Governor Notes State General Fund Spending, When Rainy Day Fund Savings Subtracted, Has Only Increased 0.3% from 2007-2013, Far Less Than Rate of Inflation and Population Growth

Full Text of Governor’s Remarks Available Here

RICHMOND- The Commonwealth of Virginia finished FY 2013 $585 million in the black. The announcement of Virginia’s fourth consecutive budget surplus in the McDonnell Administration came during the governor’s annual fiscal year-end address to the joint money committees of the General Assembly. The governor had previously announced the revenue surplus for FY 2013, which is officially $264.3 million. Today he informed the members that the second half of the overall surplus equation, state savings, came in at $320.7 million, leading to the overall surplus amount of $585 million, Virginia’s largest surplus since 2005.

This latest surplus puts the cumulative surplus total during the four fiscal years of the McDonnell Administration at nearly $2 billion. The governor also announced in his speech that even while running surpluses every year, and investing in the core functions of government like transportation, education, public safety and economic development, general fund spending in Virginia, when Rainy Day Fund deposits are subtracted, has only increased by a paltry 0.3% over the last six years, which is far less than the rate of inflation and population growth in the Commonwealth during the same period. The state budget is divided into two halves: general fund and non-general fund. The general fund is the portion largely controlled by state government decisions and consists of general tax dollars. The non-general fund is the component over which lawmakers in Richmond possess only limited discretion, as it contains funds that are legally dedicated for specific purposes such as federal funds and pass throughs and fees generated by state entities like colleges and universities.

In the governor’s remarks, which are available here, he noted, “Today I’m pleased to announce another positive result: For the fourth straight year, we have generated a significant surplus in state government finances.  The Commonwealth finished fiscal year 2013 with a total budget surplus of $585 million, the largest since 2005. This is made up of an additional $264.3 million in general fund revenue collections and transfers above the official budget estimate, up slightly from the initial $261.9 million estimate I announced last month. Additionally, we finished the year with a substantial $320.7 million in balances, savings and recoveries from unexpended general fund appropriations and other unexpended nongeneral funds that must be reported on the general fund balance sheet as liquid assets.  Taken together with the budget surpluses that I have previously announced over the last three years, the cumulative surplus for the last four years now stands at nearly $2 billion. This joint achievement is remarkable when one considers the difficult economic conditions we worked through together.  The total surplus on the revenue side alone constitutes the first time since the Allen administration that an administration has attained a revenue surplus at the end of all four of its fiscal years in office.”

The governor further stated, “Our good performance on the revenue front is concrete evidence of the Commonwealth’s improving jobs picture, real estate market, and overall economic conditions.  Virginia has created 172,600 net new jobs since February 2010.  Over 90% of those jobs are in the private sector. Virginia’s seasonally adjusted unemployment rate has declined from 7.4% in February 2010 to 5.5% today.  Our unemployment rate is the lowest rate in the Southeast, and well below the rates of our neighboring states. It is the third lowest state unemployment rate east of the Mississippi.”

Additionally, the governor reported to the committee members, “While we are on the subject of state spending, I want to call your attention to a little known fact.  If you examine the growth of general fund operating appropriations from 2007 to 2013, and subtract the required Constitutional deposits to the Revenue Stabilization Fund in those years, since those deposits are actually savings rather than spending, what you find is that the net general fund operating appropriations increased by only $56.9 million over that six-year period. This represents a total increase of 0.3% percent, which equates to an annual average growth rate in general fund spending of one-tenth of one percent per year, well below the growth rate of inflation and population growth over the same period. The bottom line is that, during this administration, we have worked closely with you to firmly hold the line on state spending and focus on economic growth. I am especially pleased with our bipartisan accomplishments and new targeted investments in K-12 and higher education, public safety, economic development, health and human services, natural resources, and transportation.”

The State Constitution and the Appropriation Act contain a number of provisions and contingent appropriations that specify how most of a budget surplus must be used. At this link you can find a full breakdown of the distribution of Virginia’s FY 2013 budget surplus: http://www.governor.virginia.gov/utility/docs/FY2013%20GF%20Surplus.pdf

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