Governor Announces Budget Revisions
Monday, Governor McDonnell offered his revisions to Virginia’s two-year budget before a joint meeting of the Senate Finance Committee and House Appropriations and Finance Committees. Proposals included:
- A number of spending cuts and agency savings along with spending increases, resulting in a proposed net budget increase of $211 million in spending, a less than one-forth a percentage point of the overall $80 billion biennial state budget.
- The states share of a proposed 2% pay raise ($59 million) for teachers, principals and instructional aides (the first in 4 years). Last week the Governor announced his “Educator Fairness Act” which ties the pay increase with a proposal to extend the time-period for provisional teacher contracts from 3 to 5 years and to make it easier to fire under performing teachers.
- A “Strategic Compensation Initiative” that would provide an additional $15 million as a statewide grant program for merit bonus and performance incentives.
- Diverting 0.05% of the state’s 5% retail sales tax revenues from the General Fund to the Highway Maintenance and Operating Fund. This produces an additional $48.1 million or the equivalent of about a 1-cent per gallon gas tax increase.
The Governor added that he will soon be submitting a “full transportation funding and reform package” that will generate more than $500 million in “total new revenues annually by 2018.” (Stay tuned for more on this!) He also announced that he does not intend to expand Medicaid under the federal health care law nor will Virginia create a state based exchange, opting for the federal government to create the health care exchange required by the new federal law. View the full text of the Governor’s presentation.