Virginia Senate Republican Caucus

Norment Budget Update

tjcosgrove's picture
Mon, 2010-01-18 19:00 -- tjcosgrove

With the 2010 General Assembly session upon us, I thought that it would be beneficial to provide you with a brief update on the overarching theme of the session, the budget.  With a $4.2 billion dollar shortfall to make up, the budget will be at the forefront of all debate.  Prior to his departure, Governor Tim Kaine introduced his budget that includes the caboose bill amending the FY 2010 budget and the new biennial budget for FYs 2011-2012.

Governor Kaine's proposals include a combination of spending reductions and revenue enhancements that have caused widespread concern.  The most notable and controversial of his proposals is the repeal of the car tax and a subsequent one percent increase in the state income tax.

Last night, in his State of the Commonwealth Address, newly inaugurated Governor Bob McDonnell made it clear that the legislature faces an unprecedented fiscal challenge, but through innovation and investments in economic development, workforce training, and transportation, we will be able to lead Virginia through these challenging times.  The Governor noted there will be reductions, consolidations and the possible elimination of state agencies and non-core services to close the shortfall.  The Governor stressed that we cannot turn around our economy by taxing Virginians more; and that he will veto any bill or budget that raises taxes.


I have provided a brief summary of legislative action that is included in Governor Kaine's budget proposal, since this will be the starting point for the budget debate.  A more detailed summary of Governor Kaine's budget can be found at:  Kaine Budget.

Clearly, much of Kaine's budget will be changed throughout the legislative process.  However, further cuts are inevitable and we must find productive and creative ways to cut costs while attempting to preserve those core services that make Virginia the best state in which to live, work and raise a family.  I look forward to working with Governor McDonnell to find solutions to make up the shortfall and preserve our quality of life.


Summary of Introduced Budget


Spending Reductions:

Ø  K-12 Education

o   Reduced funding for administrative and support staff in schools and central offices based on a funding ratio for such positions

o   Provides funds to localities for employee health insurance based on the number of employees insured - not the total number of employees as is current practices

o   Delays scheduled change in composite index of local ability to pay for one year. 

Ø  Higher Education

o   Further cuts proposed

o   Proposes that reductions to two-year schools be smaller than those to four year schools

o   No cuts to financial aid

Ø  Public Safety

o   Local sheriffs' departments with law enforcement responsibility and police departments will face 20% cuts

o   Commonwealths' Attorney's and Clerk's offices will face over 16% cuts

o   Postpones two new trooper schools in biennium

Ø  Health Care

o   Medicaid reductions of $419 million that limit Medicaid services to individuals and reimbursements to health care providers

o   Temporary freezing of certain waiver programs to include those for intellectual disabilities, developmental disabilities, day support, elderly and disabled, and Alzheimer's

o   Reduction or elimination of some Medicaid services in FY 2012 including physical, occupational, and speech therapy and lower caps on the hours of respite care for the needy

o   Cuts to non-state partners including free clinics and the Virginia Health Care Foundation

Ø  State Employees

o   664 layoffs and elimination of 1,879 vacant positions on top of layoffs and eliminations already announced

o   No pay raises in 2011 or 2012; no additional furlough days

o   VRS contributions

§  Commonwealth currently pays entire employer and employee share of retirement contributions

§  Propose that all state employees pay 1% of their salary as their share of VRS contributions in FY 2011

§  Increases to 2% of salary in FY 2012 and beyond

§  Retirement age for newly hired state and local employees increases from 50 to 55

Ø  Transportation

o   Continued cuts at VDOT to reduce staff and streamline

o   CTB 6-year plan focused on maintenance - not new construction

Ø  Local Government

o   In addition to those items already listed above that impact local governments, additional changes included

o   Commissioners of Revenue and Treasurers Offices will have funding responsibilities lie completely with local government - save for the salary of the Constitutional Officer

o   Language encourages localities to consolidate functions and seek savings


Revenue Enhancements

Ø  Car Tax

o   Discontinue the allocation of $950 million per year to localities for car tax relief - redirecting that money to other general fund purposes

o   Proposes legislation to completely eliminate car tax and impose a 1% "surcharge" on income taxes in Virginia with 100% of the revenue going to local governments in exchange for them agreeing to not impose a personal property tax

Ø  Dealer Discount

o   Eliminates Dealer Discount for retailers

o   Estimated to provide $120 million annually

Ø  Public Safety Fund Fee

o   Adds a 0.5% fee on property and casualty insurance premiums

o   Revenue deposited into Virginia Public Safety Fund - proposed to raise $22 million in FY 2011 and $44 million in FY 2012

o   Fund is used to pay for:

§  STARS maintenance and counter terrorism

§  Sheriff's offices for law enforcement and court security

§  599 funding

Ø  Line of Duty Program Fee

o   Provides a $0.18 fee increase for each line assessed the E-911 fee

o   Revenue to be deposited into the Line of Death and Health Benefits Trust Fund - proposed to raise $18.6 million in FY 2011 and $20.3 million in FY 2012

o   Fund used to pay for

§  Death and disability health benefits to beneficiaries and eligible dependents

§  Program's estimated $199.0 million unfunded liability

Ø  Recordation Fee

o   Provides a $10 fee increase on every deed on which recordation tax is applied

o   Revenue deposited in VA Natural Resources Commitment Fund and used for agricultural best management Practices cost-share program



It is an honor to serve you in the Virginia General Assembly.  If I may be of assistance, please do not hesitate to contact my office.  With kindest regards, I remain


Very truly yours,

Senator Tommy Norment






Paid for and Authorized by Friends of Tommy Norment. 

Article Content