Wednesday, March 30, 2011

Governor McDonnell Sends Down Budget Amendments

March 30, 2011

Contact: Jeff Caldwell
Phone: (804) 225-4260
E-mail: Jeff.Caldwell@Governor.Virginia.Gov

Governor McDonnell Sends Down Budget Amendments
Amendments Strengthen and Reform Virginia Retirement System; Eliminate Taxpayer Funding for Public Broadcasting
Governor Also Calls for Increased Funding for Job-Creation Efforts; $7.5 Million to Help Retain Naval Air Station Oceana; Reinstates Public Safety Funding; Dedicates an Additional $1 Million for Land Conservation
Governor’s Budget Amendment Letter Attached to Press Release

RICHMOND – Governor Bob McDonnell has submitted his amendments to the budget passed by the General Assembly during the 2011 session. The Governor sent in the fiscal amendments prior to last night’s midnight deadline for executive action. The amendments were highlighted by the Governor’s actions to strengthen the Virginia Retirement System (VRS), enhance job creation efforts, support public safety and eliminate taxpayer funding for public broadcasting in the Commonwealth.

The Governor’s actions on VRS were aimed at restoring the fiscal integrity of the system, including increasing the employer retirement contribution to all plans for the final five pay periods of FY 2012. This would result in $27.8 million in additional funding for the system. In addition, in an effort to bring the state retirement system into the 21st Century, the Governor has sent down language authorizing the creation of an optional defined contribution plan for state employees.

The Governor added $2.5 million for economic development programs to continue his ongoing effort to ensure the most pro-business environment possible in order to encourage and facilitate private-sector job creation. To support Virginia’s law enforcement community, the Governor submitted amendments to fully fund State Trooper overtime with an additional $3 million and increase support for local sheriffs by up to an additional $7.4 million. Both of these actions are intended to put more state troopers and deputy sheriffs on the street and in Virginia communities. The Governor is also again asking the General Assembly to eliminate taxpayer funding for public broadcasting. In his amendments, he has returned to his original proposal for the elimination of 50% of state funding for public broadcasting this fiscal year, and the elimination of the remaining 50% in FY 2013. The General Assembly had reduced that cut to only 10% of funding in FY 2012.

All told the Governor’s spending amendments equal only $43.8 million, which will be offset by $49.9 million in savings or additional revenue over the biennium.

The Governor’s budget amendments will:

• Secure $27.8 million for the Virginia Retirement System by increasing the employer retirement contribution

• Create an optional defined contribution plan for interested state employees

• Speed up monthly payments into the Virginia Retirement System to encourage more timely investments

• Provide local governments the option to require employees to contribute up to 5% to their own retirement plans

• Eliminate taxpayer funding of public broadcasting in the Commonwealth, saving taxpayers $4.2 million over the next two fiscal years

• Dedicate $7.5 million to efforts to keep Naval Air Station Oceana in the Commonwealth

• Support private-sector job creation by putting an additional $500,000 into the Virginia Main Street Program and restoring $2 million for industrial site revitalization

• Increase funding for the tourism marketing partnership grant program by $1 million

• Fully fund state trooper overtime through the use of an additional $3 million

• Provide up to $7.4 million for local sheriffs

• Dedicate $2.5 million for the operation of the sexually violent predator facility in Nottoway at increased capacity

• Utilize $1 million for land conservation efforts

• Support medical education at Eastern Virginia Medical School with additional $1 million in state funding

• Provide $2 million for renovation of the historic Rotunda at The University of Virginia

• Reclassify therapeutic foster care as a residential service, requiring $7.5 million

Speaking about his amendments to the current budget, Governor McDonnell remarked, “Over the past year, working in a bipartisan manner, we have cut $6 billion out of our budget. We dropped spending to 2006 levels, and we made the tough decisions that so many other states are just now beginning to contemplate. We did not raise taxes. Our efforts turned a budget shortfall into a surplus, and we are now seeing private sector job growth and economic activity pick up again in the Commonwealth. It is imperative that, as revenues rise in response to these positive developments, that we continue the fiscally conservative work that has gotten us to this point. We must invest taxpayer dollars wisely, and continue to identify spending that can be reduced or eliminated completely. We will grow our economy by keeping taxes low and budgeting responsibly.”

The Governor continued, “My amendments to this budget, which was passed with rare unanimous votes in both chambers of the General Assembly, maintain the general consensus between the House and Senate while advancing the priorities of the people of Virginia in the areas of public safety, job creation and education. Budgets are about setting priorities. In tough budget times we must have the will to determine what government must fund and what it should not, and act accordingly. We are not going to raise taxes in Virginia. Every dollar counts and must be spent wisely. That is why I have called again for the elimination, over the next two years, of all state funding for public broadcasting. In a world of broad and diverse options for news and entertainment, government should not be funding one specific channel as it competes against others in a free market. Television and radio broadcasts are not core functions of government. That $4.2 million can be better used elsewhere.”

The Governor added, “We have also proposed putting an additional $27.8 million into our woefully underfunded Virginia Retirement System through increased employer contributions. We will give state employees more control over their own financial futures by establishing an optional defined contribution plan that they can choose to participate in. We have a lot of work left to do to get our system solvent for the future, but this is a start in the right direction. It is time we brought our retirement system into the 21st Century. We will also continue to create a climate conducive to private-sector job creation by investing in state programs that help private-sector job creators to grow and thrive in the Commonwealth. We are wide open for business and we must continue to take every necessary step to ensure Virginia remains the best place in America in which to do business. I am also pleased to be able to return amendments providing for critically needed overtime pay for our State Troopers, and funding to help keep Naval Air Station Oceana in Virginia Beach. Oceana is an economic engine for the region and the state, and it is crucial that it remains in Hampton Roads.”

The General Assembly will consider the Governor’s budget amendments when it meets next week for the reconvened session.

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