Senator Jill H. Vogel
August 20, 2012
Last week, I joined my fellow Finance Committee members for a meeting with the Governor on the Commonwealth’s economic outlook. The briefing included a remarkably positive report of the state’s finances, announcing that the Commonwealth finished FY 2012 with a budget surplus of $448.5 million. Some tough choices by the legislature and the Governor paid off and for the third straight year, the state brought in more revenue than forecasted and spent less than budgeted. Much of this is attributable to recent reform measures, consolidation and savings requirements as well as the hard work of agency managers who were forced to be very frugal.
Unemployment numbers are also trending in the right direction in Virginia. Our unemployment rate in Virginia dropped from 7.2% to 5.7% in the last two years, an overall drop of more than 20%. It gives us a significantly lower unemployment rate than anywhere in the southeast.
The good news about our budget surplus has led to many questions about how the surplus will be used. Parameters established by the legislature and the Constitution set forth how the surplus must be allocated. This year, $78.3 million will be set aside for the Rainy Day Fund, bringing the Rainy Day Fund’s balance to $689 million. That represents the highest balance since 2008 and the fifth highest balance ever. In addition, $30 million of the surplus will go to the Federal Action Contingency Trust (FACT) Fund established to help absorb the expected negative impact of certain federal actions. Another $132.3 million of the surplus will be allocated to higher education and nongeneral fund accounts. $16.9 million will go to the Virginia Water Quality Fund to help meet the obligations under the Watershed Improvement Plan (WIP) to accelerate efforts to clean up the Chesapeake Bay. Since 2010, this means we will have committed $103.7 million from surplus to the Water Quality Improvement Fund. Also, $20.9 million of the surplus will go to the Transportation Trust Fund and $17.2 million will be allocated to cover costs of several natural disasters that occurred in 2012.
Finally, one of the most significant impacts of the surplus is that it will allow state employees to receive the full 3% performance bonus payable on December 1. State employees have gone five years without a pay raise and that is an embarrassment. We cannot afford to lose quality law enforcement, teachers and other state employees because they cannot earn a living in our state.
There is still a lot of budget work remaining in the late summer and fall as my subcommittees continue to meet for finance briefings, weighing impacts like healthcare changes and federal sequestration, the mandatory federal spending cuts in the Budget Control Act of 2011. If the federal government embarks on the path of sequestration, the job loss alone will be 207,571 jobs, the second highest loss in the nation.
We continue to discuss the impact of changes in the Virginia Retirement System. As a result of our reform bill in 2012, we were able to fund the highest employer contribution in VRS history, which includes $2.4 billion over two years in employer contributions for state employees, teachers and law enforcement.
Following meetings in Richmond last week, I joined the Virginia Circuit Court Clerks’ Association for their annual meeting in Portsmouth. I was honored to be named their Legislator of the Year for budget and legislative work during the 2012 session. It is certainly worth noting that everywhere there was evidence of the leadership of our local clerks.
As always, I take your thoughts and opinions seriously and hope that you will contact our office any time that you have questions or concerns. You may reach me at 540-662-4551 or send an email email@example.com or firstname.lastname@example.org.
Senator Jill Vogel represents Virginia’s 27th district which includes Clarke and Frederick Counties, the city of Winchester, and parts of Fauquier and Loudoun Counties.