McAuliffe signs budget, lauds cooperation with legislature

3/26/2015 –

There will be no budget drama when the General Assembly convenes next month for its annual veto session.

Gov. Terry McAuliffe on Thursday signed a two-year budget with no amendments, no vetoes and no conflict with the General Assembly budget officials he gathered in his third-floor Capitol office for the ceremony.

“We have laid a very solid foundation with this budget to move Virginia forward,” he said.

Now that the budget is signed and sealed, the only remaining question is whether state revenues will allow the governor and lawmakers to deliver on their promise to provide raises for state workers and teachers.

The $99.7 billion budget covering July 1, 2014, to June 30, 2016, includes $35 billion in general funds from state taxpayers and $2 billion in transfers, including profits from the state liquor monopoly.

It features a $129.5 million early deposit to the state rainy day fund to begin replenishing the financial reserve after tapping it last year for $705 million to help fill what had been projected to be a $2.4 billion revenue shortfall over the biennium.

The budget features $153 million for a compensation package that includes a 2 percent raise for state employees, college faculty members, and state-supported employees, such as sheriff’s deputies and constitutional officers.

It also includes the state’s share of a 1.5 percent raise for teachers, money to boost salaries for correctional officers and other high-turnover state jobs, and gives additional money to veteran workers whose pay is lagging behind market rates, especially at the Virginia State Police.

The raises depend on continued recovery of key state revenue sources — income taxes withheld from paychecks, estimated income tax payments and sales taxes. The raises are due to take effect Sept. 1, but state revenue officials said they will know by late June whether revenues are sufficient to support the pay increases.

“I feel confident the revenue will be there,” said House Appropriations Chairman S. Chris Jones, R-Suffolk.

McAuliffe invited Jones and Senate Finance Co-chairman Walter A. Stosch, R-Henrico, as well as other House and Senate leaders, to witness the signing of what the Democratic governor hailed as a “balanced budget, a sustainable budget” achieved by bipartisan cooperation.

“We didn’t always agree, but when we disagreed, we did it privately,” the governor said.

The legislators also were joined by Senate Finance staff director Betsey Daley and House Appropriations staff director Robert P. Vaughn, who worked closely together and with the McAuliffe administration to deal with a revenue shortfall that surprised state officials last May.

“The shortfall made us work together,” said Secretary of Finance Richard “Ric” Brown.

McAuliffe commended the budget writers for protecting funding for K-12 education, as well as finding money for his priorities, such as economic development, housing, and health care for more than 21,000 people with serious mental illness.

It also includes a $400,000 in reparations for people who were sterilized against their will in state institutions, such as the Central Virginia Training Center in Lynchburg. The governor said he supported the appropriation, which Del. John M. O’Bannon III, R-Henrico, said the money committees considered carefully.

“No amount of money will make these people whole,” O’Bannon said.

McAuliffe said the budget would position Virginia well to withstand further potential cuts in federal spending through sequestration, or automatic reductions in defense and discretionary spending.

The budget is the last negotiated by Stosch; Senate Finance Co-chairman Charles J. Colgan, D-Prince William; and Sen. John Watkins, R-Powhatan, who will retire when their terms end in January.

Stosch said he could not recall a previous year when he and his House counterpart would not have to explain the governor’s proposed budget amendments or vetoes to legislators during the annual reconvened session, scheduled for April 15.

“For those who follow, you might want to continue that model,” he said.

Colgan was absent from the budget signing, but Watkins quipped, “It’s always good to leave on a high note — and this is a high note.”