So, apparently everyone is giddy that the state government collected $553 million more than it could spend last year. In other words, a budget surplus.
“Virginia’s significant revenue growth and preliminary year-end revenue surplus are a clear indication that our efforts to grow and diversify our economy are paying off,” said Governor Terry McAuliffe. “While we still have more work to do to shield our economy from sequestration and federal cuts, there is no question that we are headed in the right direction. I want to thank the bipartisan leaders in the General Assembly who worked with my team earlier this year to close a major revenue shortfall, get state employees a much-deserved raise and lay a foundation for future growth. I look forward to working with my colleagues to build on this momentum and lay a foundation for a new Virginia economy.”
I actually applaud the governor for what is a pretty rational statement.
However, let’s not forget that it took a great deal of backbone in the General Assembly to resist calls to mandate excessive spending in perpetuity on healthcare. And that this budget is a direct result of the senate switching from a Democrat majority to a Republican one in 2014.
“The budget that ultimately led to this surplus was only approved after the Senate Democrats’ 136-day majority ended,” said Senate Majority Leader Tommy Norment. “On the very same day Senate Republicans regained the majority, we acted swiftly to approve a budget and end the Democrats’ three-and-a-half-month budget stalemate.
“Not a single Senate Democrat supported that budget, which required the vote of every Republican senator to be approved. It is that budget, along with the swift action taken to remedy a newly identified revenue shortfall last November, that resulted in today’s announcement of a surplus.”
It’s good to see that Speaker of the House William Howell gets it:
“While this news is certainly positive, we must also remain cautious. Virginia’s economy continues to struggle. We reported zero percent growth in the first quarter and recently fell to 12th on CNBC’s list of Top States for Business. Those facts and continued uncertainty mean Virginia must develop a stronger, more focused strategy to create jobs and long-term economic growth. We must also avoid taking on new, long-term obligations like Obamacare’s Medicaid expansion. Despite the federal government’s promises, Virginia taxpayers will eventually be left to shoulder the cost of expansion. We are committed to strengthening our health care safety net without expanding government-run entitlement programs.”
Just don’t expect any of this surplus to be returned to you anytime soon. It’s heading straight to Virginia’s rainy-day fund.
Update: An astute reader also reminded me of this from a couple weeks back in the Virginian-Pilot
“Virginia this year expanded its accelerated sales tax program. Previously, it applied to businesses with at least $26 million in annual sales. The threshold this year was lowered to $2.5 million.
The program frontloads, but doesn’t increase, tax payments. Here’s how it works: This month, businesses have to pay both their sales tax for May and an estimated 90 percent of their bill for June. Next month, they’ll pay the remainder for June.
The state said the change would add $39 million in revenue for fiscal 2015, which ends this week.”
So…small businesses…thanks for helping carry the load.
