Virginia’s Chronic Budget Surplus: An Update

State lawmakers will have an extra $600 million to play with when it reconvenes in January and next, but Del. Vincent F. Callahan Jr., R-Fairfax, chairman of the House Appropriations committee, is urging fiscal caution. Revenue growth is slowing from the double-digit rate of the past few years to a single-digit rate.

Says Callahan: “We can ill afford to repeat mistakes of the past, where, in times of what appears to be plenty, we created costly new programs before fulfilling previously made commitments.” He recommended spending the money on one-time expenditures such as construction projects rather than ramping up new programs. (The Richmond Times-Dispatch has the story. So does the Washington Post. And the Virginian-Pilot.)

Callahan makes total sense to me. However, I suspect that Gov. Timothy M. Kaine, now on an economic development mission in Europe, may disagree.

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2 responses to “Virginia’s Chronic Budget Surplus: An Update”

  1. James Atticus Bowden Avatar
    James Atticus Bowden

    Jim: Have you gone mad? A surplus is free money to politicians. Its supposed to be spent as an investment to the infrastructure, for crucial services, and vital government works. Of course, this money isn’t as good as ‘reliable’ streams of income, which are substantively different from this fun money surplus.

    You really need to get on board with new Clintonian economics. The old cycles and supply and demand curves don’t exist any more in our new Info Era economy.

    Know a museum that needs a new exhibit or a pay raise for the director? Name your need, the GA has more extra cash.

  2. Larry Gross Avatar
    Larry Gross

    I’m flabbergasted that our process for budgeting continues to be so Ad Hoc and so political.

    Surpluses that are known to be temporary and not sustainable absolutely positively should be spent ONLY on defined capital project needs.

    It’s loony to consider surplus for existing operational funds or new programs.

    Define Capital Projects – ARE those that the GA has APPROVED… sit on a list in priority rank order and get funded either by the annual capital budget or by one-time surpluses.

    ALSO… with regard to ranking projects.. the following thoughts:

    1. – make a decision about whether transportation funds and revenues are going to be “firewalled” in BOTH directions. Not only to NOT spend transportation funds on other uses – but ALSO – not to fund transportation projects from the General Fund … OR come up with a defined process for doing so – and move us away from
    ad hoc political free-for-alls..

    2. – We need to recognize that VDOT employees..(I believe) 9k of them are paid for by general revenues. Why is this important?

    Well.. for one … when you talk about the cost of METRO.. it includes employees… that affect the farebox recovery numbers. We need to figure in the “cost” of VDOT personnel in administering roads and maintenance if we want a more fair comparison of the numbers.

    3. – Capital Projects that are for “new” things that require “new” personnel should be classified separate from infrastructure that does not require “more” personnel.

    For instance, a replacement building for a school won’t require new employees … but a “New” college of “whatever” or a “new” State Park has annual general revenue fund implications. We’re not just buying a building, we’re agreeing to more salaries, benefits, etc that will ADD to our future annual budget needs.

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