It sounds like a long time ago, but back in January when you sent me to Richmond for the first time, my colleagues and I were facing a daunting $1.8 billion budget shortfall. However, last week Governor McDonnell announced that Virginia's Fiscal Year 2010 budget ended with a "surplus" of $403.2 million dollars. This additional money was the result of $228 million more in collected revenues than expected and $175 million in unspent agency balances.
Despite these revenues and savings, general fund revenues still declined in 2010, the first time in history that general fund revenues declined in two successive years. However, they declined only 0.7%, rather than the forecasted 2.3%. We must continue thoughtfully and carefully reducing the cost of government going forward to ensure that our state, like its citizens, is living within its means.
Our budget bill dictates that $82.2 million of the surplus will go towards a one-time 3% pay increase to state employees on December 1. The Code of Virginia next dictates $36.4 million of the surplus be designated for the Virginia Water Quality Improvement Fund to help fund additional cleanup efforts in the Chesapeake Bay. And for the first time since its passage in 2007, a provision from HB 3202 sets aside two-thirds of all undesignated surplus balances for transportation, which in this case, is $32.7 million. That amounts to only 8.1% of our over $400 million surplus that will be put towards transportation--a small investment that is nowhere near the amount we need to fix our roads. Last, an additional $18.7 million was sent to local school districts.
Looking forward, Virginia is one of the only states to have already balanced a budget for FY 2012, the first year in which states will no longer receive federal stimulus funding. Decreases in state spending are a large part of our balanced budget. In fact, spending levels are equal to those of 2006. Additionally, the FY 2011/2012 budget includes $620 million in deferred VRS payments to avoid further spending cuts. As you may recall, I spoke out against the VRS deferral. I applaud the Governor's commitment to paying at least the $74 million per year required towards that loan. When appropriate, I will urge the General Assembly to accelerate those repayments.
Since January, there are over 145 economic development projects, resulting in the creation of almost 8,000 jobs and over $1.18 billion in new capital investment. Our increased funding to the Governor's Development Opportunity Fund, this past session, has made a positive impact on private-sector investments. Earlier this month, the Pollina Corporate 2010 rankings named Virginia as the "most pro-business state in America, and last month, for the fourth straight year, CNBC ranked Virginia one of the top two states in the nation for business. These rankings matter and show companies everywhere that Virginia is "Open for Business." Despite this national recognition, the recent announcement of the administration closing JFCOM--with no notice, public hearing, BRAC process, or clear cost-benefit analysis shows we must stay vigilant. I have elevated military issues to my priority list, which already includes attracting businesses, fixing transportation, and continuing to lower the cost of government.
Our Governor and I are committed to continuing our conservative revenue estimates, while spurring economic development to create jobs that will at first sustain and then increase our revenues.
If you support my efforts in the Virginia Senate to help our Commonwealth continue to be business-friendly, please consider supporting my campaign financially. Funds are needed to prepare for next year's election and continue to maintain an efficient district office that is available to assist you. For your convenience, you can click here to make an online donation. Thank you in advance for your generosity.
Jeffrey L. McWaters