The Virginia House of Delegates and Senate passed a spending bill last Thursday to resolve a $2.4 billion budget deficit — the result of a previous revenue shortfall. The legislation, a bipartisan agreement that received overwhelming approval in both houses, will significantly cut spending for fiscal years 2015 and 2016.
Gov. Terry McAuliffe announced the agreement last Monday and is expected to sign it into law soon. The House passed the bill 93-4, and the Senate approved it 36-2.
The bill provides for an estimated $705 million in funding to be drawn from the Revenue Stabilization Fund, also known as the rainy day fund, in FY 2015 and FY 2016. State agencies would receive the largest hit from the budget cuts, losing $192 million of funding in the two years. It also cuts $90 million from higher education institutions and $60 million from local governments during that time period.
In the bill, the Department of Planning and Budget states funds will be appropriated from various agencies, including the Natural Resources Commitment Fund, Virginia Alcohol Safety Action Program, and the Highway Maintenance and Operating Fund.
The House determined that $45 million will be transferred from higher education funding this year as part of the budget cuts, including more than $8 million from the University. The House stated that “these savings are to be achieved through productivity and operating efficiencies and not through new rate increases on tuition, fees, or other non-general fund enhancements imposed by the Boards of Visitors [of each public university and college].”
The budget cuts will exempt K-12 education and health care.
“Teachers and students in Virginia’s public education system are protected from these cuts, and the House of Delegates has reduced by nearly half the reductions that Gov. McAuliffe requested for higher education,” House Majority Leader Kirk Cox, R-Colonial Heights, said. “This should protect our Virginia students and families from increasing tuition costs.”
Rep. Steve Landes, R-Augusta, vice chairman of the House Appropriations Committee, said though some legislators are reluctant to utilize one-time resources to balance the budget, the House is confident the rainy fund will protect local governments, fire and police departments, and other programs from receiving detrimental reductions.
“It is a tough decision to make, but that is exactly why each member of the General Assembly was elected,” Landes said.
The budget shortfall is the result of lower than expected revenues, which can be attributed in large part to federal spending cuts affecting Virginian jobs, notably in the defense sector.
“The unexpected budget shortfall is the result of sequestration and increased federal taxes,” said House Speaker William Howell, R-Stafford, in a press release. “These federal actions had a disproportionate impact on the Commonwealth, leaving the General Assembly with a number of tough decisions to make.”
Virginia’s constitution requires the state have a balanced budget each year.
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