The Virginia House of Delegates recently announced an excess of state finances for 2007. The state will have the opportunity to spend $550 million to $600 million in addition to the previously approved state budget.
House Appropriations staff director Robert P. Vaughn attributed the surplus to state corporate and estimated revenue payments, which account for 17 percent of the state's overall revenue.
"Estimated payments are a hodge-podge of payers on the corporate side of big companies like Ford Motor Company or Exxon oil," Vaughn said. "Estimated payers are a lot of your small businesses that pay money on an estimated basis as if it were individual income to them. They pay taxes in this state, but they are not large corporations."
Since corporate and estimated payment sources are a "volatile" source of state revenue, Vaughn advised against investing in long-term fiscal programs.
"I urged that they really look at one-time spending, like an academic building at U.Va. or transportation and spend it on a road," he said. "Once you build it, you don't have that obligation anymore. Once you put it into a program, you have to keep putting it into that program."
According to state Secretary of Finance Jody Wagner, this excess in revenue is just an "incremental amount" for Virginia. Previously planned state programs requiring additional funds will be the first to benefit from the surplus, she predicted.
"There are expenses that have not dealt with the budget adopted in June," Wagner said. "For example, second-year teacher's salaries for all teachers across the state need to be funded. We will have money to do other things, and it will have to be a prioritization with what Virginia does with the additional revenue."
While different approaches to the transportation problem were debated during the General Assembly's last session, delegates did not agree on a plan. Wagner said the transportation issue calls for a long-term solution that cannot be addressed by the current surplus.
"The problem with transportation right now is that we have a relatively stagnant source of revenue that needs to handle both maintenance and construction," Wagner said. "Most members of the General Assembly and the governor recognizes that we need to enhance transportation revenues, but we can't just do it on a part-time basis. There needs to be a long term solution."
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