Governor McDonnell Announces Amendments to Biennial Budget
– Investments Focused on Key Job Creation Drivers: Economic Development, Higher Education, Transportation and Government Reform –
Amendments Contain $191 Million in Cuts, Savings and Reappropriations to Priority Areas
RICHMOND- In a speech to the members of the Senate Finance, House Appropriations and House Finance Committees this morning, Governor Bob McDonnell put forth his full package of amendments to the current biennial budget. The amendments are focused on prioritizing state dollars to encourage job creation. McDonnell directed state funds towards the job-creating areas of economic development, higher education, transportation, and government reform. In addition, the Governor discussed his plan, announced yesterday, to ensure the Virginia Retirement System's (VRS) future viability and solvency. Also contained within the package of amendments are major proposals to strengthen the Commonwealth's mental health system and bolster environmental protection and conservation efforts. While revenue estimates were adjusted slightly upwards in response to a conservative revenue forecast based on the impact of recent job creation and economic growth on state coffers, the Governor also announced cuts, savings and reappropriations in the budget totaling $191 million.
Highlights of The Governor's Biennial Budget Amendments
- $54 million for Job Creation and Economic Development proposals including initiatives to grow Virginia's innovation economy, revitalize economically distressed communities, expand small business and tourism and train workers for Virginia businesses.
- $150 million to jumpstart the Virginia Transportation Infrastructure Bank. Money will be coupled with $250 million from the VDOT audit to put $400 million into the Bank at start, with funding to rise to $1 billion by end of Administration. This is part of the Governor's plan to inject $4 billion into transportation over the next three years. Other components include the issuance of $1.1 billion in federal GARVEE Bonds which do not add to state debt capacity and the issuance of up to $1.8 billion in already approved transportation bonds.
- $50 Million for Higher Education geared toward increasing college access and affordability and meeting the goal of awarding 100,000 degrees over the next fifteen years in the Commonwealth
- $191 million in Cuts, Savings and Reappropriations recommended by the Governor's Commission on Government Reform and Restructuring, providing more state funding for core functions of government focused on job creation and economic development
- Reform of Virginia's Retirement System (VRS) requiring all state employees to contribute 5% to their retirement plans. The reforms will put over $300 million in additional funds into the VRS system in FY 2012 alone and will add $4.2 Billion over the next 10 years. The employee contributions will be matched with a 3% pay raise.
In his remarks at the General Assembly Building the Governor stated, "Our budgetary outlook hinges largely upon the ability of the private sector to create good jobs. Government can make it simpler for entrepreneurs and job creators to invest and expand, or more complicated. We choose the former. I am pleased to say that in our first 11 months together we have made it clear that we are wide open for business, and that Virginia's state government is a friend of the free market, small business owners, entrepreneurs, and job creators."
He further noted, "Helping the private sector create good paying jobs remains our top goal. You will see that in the budget amendments we are putting forward today. From our recommended new investments in higher education, to our new job-creation initiatives, to our plan to put $4 billion into transportation over the next three years, it all focuses on getting our economy back on track and our people back to work."
The Governor added, "Government must set priorities, encourage cost-savings and frugality, fund core functions well, set the right climate for job creation and economic growth, and then get out of the way. Addressing unfunded liabilities and core services are at the heart of the amendments I am sending to you today. Our Administration is focused on four top priorities this session: Government Reform, Economic Development, Transportation, and Higher Education. All these are pivotal towards accomplishing our common goal of job creation and economic recovery."
A full copy of the speech has been released separately and is also available on the Governor's website.
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