Finding our way to a state budget
ON THURSDAY, the Virginia House of Delegates and Senate adopted their respective versions of the state’s two-year budget.
As chairman of the Appropriations Committee, I have the distinct privilege of working with 21 of my colleagues to craft the House budget proposal. Our budget is a conservative, responsible spending blueprint that prioritizes savings, takes steps to reduce state liabilities, cuts back on borrowing and makes targeted investments.
Negotiators from the House and Senate now begin the process of crafting a final agreement. I am confident we can work with our Senate colleagues to send Gov. Terry McAuliffe a budget for his approval as the 2016 General Assembly adjourns.
The House budget follows Virginia’s longstanding practice of conservative and cautious budgeting. Unlike Washington, Virginia’s constitution requires a balanced budget.
The House budget prioritizes savings and reduces future state liabilities. The House budget calls for depositing $605 million in the state’s rainy day fund, restoring the fund to 90 percent of its balance before the 2014 budget shortfall. We also call for paying back $190 million in deferred payments to the Virginia Retirement System and fully funding VRS at 100 percent of the rates requested by its board. Restoring these funds and meeting our required contribution eliminates future liabilities, saving taxpayers money down the road.
Additionally, the House plan reduces what Virginia would borrow in coming years. The funds from this bond package will be used for major construction projects and capital improvements. Unlike the federal government, Virginia does not borrow money for day-to-day spending. McAuliffe initially suggested over $3 billion in borrowing before proposing a $2.4 billion bond package. The House proposal reduces that even further, to under $1.6 billion.
The wisdom of our conservative approach has been proven time and time again. Last year, we budgeted very conservatively, resulting in the largest single-year revenue surplus in state history. Virginia is consistently recognized as one of the nation’s best-managed states and is one of just 12 with a Triple-A bond rating from all three major credit agencies.
While the House budgets conservatively, we still make healthy investments in key priorities like K-12 and higher education, and economic development.
We put $897 million in new money toward our schools , including funding for a 2 percent raise for teachers. Our investment exceeds that of McAuliffe’s proposal by over $70 million.
We also restored $272 million in lottery funding for our schools, giving divisions significantly more flexibility than under the budget proposed by the governor or the Senate. Local school leaders from around the commonwealth are applauding this proposal, which will allow them to meet the unique needs of their own school divisions rather than adhere to one-size-fits-all policies from Richmond.
Education does not stop at high school graduation and neither do our investments in Virginia’s future. The House is committed to making college more affordable for Virginia families. The House budget exceeds McAuliffe’s investment in higher education by nearly $66 million, including more than $230 million to hold tuition increases to three percent or less.
The House budget also funds strategic and targeted investments in economic development while promoting increased accountability and oversight. We must invest in growing our economy, but we cannot do it with a blank check.
The House proposes $110 million in new money for economic development, but directs most of that new funding to initiatives with stringent accountability mechanisms: GO Virginia and the Virginia Research, Development and Commercialization Fund. The initiatives place a greater emphasis on accountability, which means your tax dollars will go further.
Getting to the final budget agreement is never easy. The governor, House and Senate often have different priorities that must be reconciled. I believe the House budget is a strong starting point for our discussions. We have laid a solid, conservative framework and made investments in our key priorities. We look forward to working with the Senate to complete Virginia’s two-year budget.
Del. S. Chris Jones