Delegate Mark Keam - Virginia's 35th House District

Delegate Keam quoted in Fairfax Times about the Budget
Wednesday August 25, 2010

Virginia ends the budget year with $400M surplus

Legislators approve about $82 million in bonuses for state employees

by Kali Schumitz | Staff Writer

Virginia ended the budget year with about $400 million more than expected, Gov. Robert F. McDonnell (R) announced last week, reflecting the first overall revenue growth in the state since 2007.

Most of the surplus funding, which came from state agency cutbacks and higher-than-expected sales tax revenues, is spoken for, said McDonnell, who urged legislators to "not get too excited." The state collected $228 million more in revenue than budgeted and spent $175 million less than expected, McDonnell said.

After replenishing reserves and fulfilling other approved spending, state leaders have about $71 million to spend. Any spending decisions not already included in the fiscal 2011 budget will not be made until the next General Assembly session in January.

State employees will all receive a bonus equivalent to 3 percent of their salaries on Dec. 1, costing the state about $82 million. Legislators approved the bonuses, a McDonnell initiative, contingent on surplus dollars being available.

"Our employees knew there would be a financial reward for saving taxpayer dollars and returning unspent balances to the general fund," McDonnell said last week. "This notion of gain sharing or economic rewards for getting results is a concept widely used in the private sector, and long overdue in practice and implementation within state government operations."

Vienna Del. Mark Keam (D-Dist. 35), a member of the House of Delegates Finance Committee, said the "surplus" is more of an accounting mechanism, not extra funding to replenish state programs that were cut earlier this year.

"It's positive news in that we are not in a deficit ... but I don't want anybody to think that it is all sunshine and good news," Keam said. "That money is already allocated to various obligations we already have."

School divisions have received a bit of extra cash because of increased sales tax collections -- about $19 million was distributed statewide. Other designated portions of sales taxes include $37.5 million for local governments and $28 million for the state's transportation trust fund.

McDonnell must decide by Nov. 1 whether the discretionary $71 million should be retained in state agencies or if it should be reallocated. He will make his budget recommendations in December.

Keam said he would like to see some of that money go to restore Medicaid cuts and fund additional Medicaid-supported services for people with disabilities.

(Photo from the Office of the Governor)
Virginia Gov. Robert F. McDonnell (R) laid out his plans for the state's $400 million budget surplus during a joint session of the Senate Finance, House Appropriations and House Finance committees on Aug. 19.
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