State celebrates surplus
After facing a $1.8 billion deficit in January, the commonwealth is celebrating an estimated $220 million surplus at the end of the fiscal year.
The numbers won’t be made official until August, but state officials are already celebrating — and allocating the money to bonuses for state employees, additional money for local school districts and more funding for efforts to clean up the Chesapeake Bay.
“This is a positive development for our state, but this continues to be a very tough economy,” Gov. Bob McDonnell said in a press release Wednesday. “Through reducing spending and making tough choices, we have closed historic budget shortfalls without tax increases, and run a surplus.”
The largest source of the surplus was better-than-expected collections of individual and corporate income taxes, the release said.
Delegate Chris Jones (R-Suffolk) was happy to hear of the projected surplus.
“We had been given an indication last month we were tracking a surplus, and I’m certainly pleased that’s the case,” Jones said. “I think it’s a direct result of reducing spending. I think [we] did a good job on forecasting of revenues, and departments and agencies held the line on spending for the last three months of the fiscal year. This puts us in much better position going forward for the next budget year.”
About $18 million in funding will benefit local school districts, according to the press release. However, Mike Brinkley, executive director of finance for Suffolk Public Schools, said the division won’t be seeing any more money coming its way.
“This is not additional money above our budgeted revenues,” Brinkley said in an emailed statement sent by division spokeswoman Bethanne Bradshaw. He explained that the increased estimates are above the mid-year reduction budget done by former Gov. Tim Kaine, but still below the original state estimate and budgeted revenues.
Another part of the money will be used to give all Virginia state employees a one-time, 3-percent bonus in December, making good on a McDonnell promise to the General Assembly to hand out bonuses if a surplus was achieved.
“For too long, the unfortunate standard procedure in state government has been for agencies to spend down all appropriated funds to zero prior to the ending of the fiscal year,” McDonnell said. “We successfully changed that model by implementing private sector principles of rewarding fiscal discipline and sound management of scarce resources. State employees were successful in identifying more than $28 million in savings.”
State employees have gone nearly four years without a pay raise, the release stated.
In addition, $22 million is being set aside for Virginia’s Water Quality Fund, which helps with Chesapeake Bay cleanup efforts. Finally, part of the money will be used to make a deposit into the Transportation Trust Fund.