Virginia Senate Republican Caucus

Good News on the Fiscal Front--and a McDonnell Town Hall

ajohnston's picture
Mon, 2010-08-23 20:00 -- ajohnston


Last week, Governor McDonnell formally announced a major milestone in the ongoing effort to restore fiscal prudence in state government. When my colleagues and I went to Richmond in January, we were staring down the barrel of a $1.8 billion budget shortfall, coming on the heels of substantial cuts just to bring the previous year's budget into balance. When the books closed on Fiscal Year 2010, however, the story was different: we had $403.2 million left over.

I'll be frank with you: I'm a little hesitant to call it a surplus, or to celebrate too euphorically. Much of this money is already committed under budget language that dedicated any revenue in excess of projections to a variety of different expenditures, including $32.7 million to transportation, $18.7 million more for local school districts, $36.4 million to the Water Quality Improvement Fund (this is mandated by law when we experience "excess revenues"), $82.2 million to a one-time bonus for state employees, and $16.3 million to other non-recurring expenditures.

When it's all said and done, we've already spent most of this "surplus," and we have both current and future debt obligations that we must bear in mind. But I don't want to pour cold water on the good news, because it is indeed good news.

After all, we beat revenue projections - and that hadn't happened for a while. I was a vocal critic of the overly rosy revenue projections used by the Kaine administration to justify pet projects we couldn't possibly afford, and I strongly urged that we not make the same mistakes this year. The McDonnell administration was on the same page, and the budget bills we passed this January were much more realistic than those to which we had been accustomed.

The amended budget for the remainder of FY 2010, moreover, and the new budget we passed for Fiscal Years 2011-'12, focused on reduced spending, incentivizing savings, encouraging economic growth, and taking a more realistic view of where we stood. There's a long way to go, but this more conservative approach is already starting to pay dividends.

It wasn't easy, and no one is happy about some of the cuts we had to make, but we made a $2.2 billion turnaround without raising general taxes. Yes, there's a caveat there, in "general taxes." The budget did include a few fee increases and the accelerated sales tax (though the latter did not contribute substantially to the excess revenue), which is why I voted against the final budget, even though I thought it represented a marked improvement from where we were in previous years.

Credit where credit's due: the budget wasn't perfect, but those improvements were considerable, and Governor McDonnell deserves credit for setting the tone and insisting on greater fiscal responsibility. This is a first step toward an enhanced measure of fiscal discipline in Richmond, but it shouldn't be the last. This news reminds us, however, that it is possible for government to live within its means. Washington should take notes.

If this is the first step, though, we're already embarked on the second, and this Thursday, August 26th, the Governor will be hosting a town hall meeting in Harrisonburg talking reform. This is your chance to share your ideas with the Governor or ask any questions you might have, and I strongly encourage you to take advantage of it.

The town hall will be held in the JMU East Campus Dining Hall's Montpelier Room at 7 PM. You can learn more on this page. I hope to see you there!

With best regards,

Mark D. Obenshain
Virginia State Senator