A year after closing a $4.2 billion budget gap, largely by chopping services like K-12 education and health care, Virginia lawmakers face a marginally brighter outlook as they prepare to gavel in the 2011 session of the General Assembly on Wednesday. Still, lawmakers agree that money — or lack of it — will define their 46-day session.
Following deep cuts that rolled state spending back to 2006 levels, legislators will spend the session revising the state’s budget through 2012 with a bit more breathing room, as the economy creeps forward and tax revenues recover.
“At this point, there is no shortfall,” said Dick Hickman, deputy staff director for the Senate Finance Committee.
Republican Gov. Bob McDonnell has rolled out an ambitious agenda that includes spending about $54 billion on economic development and $50 billion on higher education.
The governor also wants to spend $400 million as part of a $4 billion plan over the next three years to fix the state’s ailing roads and bridges. About three-quarters of the money would be borrowed.
State Sen. Dave Marsden, D-Fairfax, said he’d like to support the governor on such big-ticket items — provided plans don’t involve irresponsible borrowing. McDonnell and Virginia legislators were assured in a recent meeting with bond-rating agencies that the state’s prized AAA-bond rating is not in jeopardy.
“He’s trying hard, and I can appreciate the spot he’s in,” Marsden said.
Lawmakers still insisted that money would be tight.
“We’re still in the middle of a recession, so money is everything,” said Del. Dave Albo, R-Fairfax. “I don’t think you’re going to see any new initiatives.”
Lawmakers also must deal with Virginia’s depleted retirement system, which is underfunded by about $17.6 billion.
In an effort to shore up the fund, McDonnell proposed increasing the state share for state retirement plans starting next July, at a cost of $122 million, and requiring state employees to pay into those plans for the first time since 1983. The state deferred more than $600 million in payments to the $50 billion system to help balance the 2011-2012 budget.
“We really did go after the {Virginia Retirement System] and we almost depleted our rainy day fund,” said Del. Patrick Hope, D-Arlington. “It’s going to be another year of belt-tightening.”
