Speaker Howell, House Leaders on Budget Deal

HouseGOP2014 General Assembly Session, Budget, Issues

Today, Governor Terry McAuliffe, Speaker Bill Howell, House Appropriations Committee Chairman Chris Jones, Senate Finance Co-Chairman Chuck Colgan and leaders from the General Assembly money committees announced they had reached a bipartisan agreement on how to tackle Virginia’s budget shortfall. The agreement will close $346 million this fiscal year and will address the $536 million gap for Fiscal Year (FY) 16.

“Addressing Virginia’s budget shortfall sooner rather than later is the fiscally responsible thing to do,” said House Speaker William J. Howell. By acting now, we can create certainty for Virginia’s economy, give state agencies and local governments flexibility, and most importantly send a strong signal to the bond rating agencies that Virginia is serious about protecting its AAA -bond rating. We have once again proven just how big a difference 90 miles can make. While Washington continues to kick the can down the road, Virginia is demonstrating that elected leaders can work together, make tough decisions, and find ways for government to live within its means.”

“Virginia stands at an economic crossroads and the decisions we make today will affect the Commonwealth for years to come,” said Governor Terry McAuliffe. “I am pleased we were able to come together in a bipartisan way and make the tough decisions that will help ensure Virginia remains fiscally strong and provide much-needed certainty to the bond rating agencies on Wall Street. While the budget shortfall is forcing us to tighten our belts, I am proud that we were able to protect many of our core democratic priorities, including health care and K-12 funding for this fiscal year. The plan also prioritizes higher education by reducing the average budget reduction for public colleges and universities from an expected 5 percent to 3.3 percent for FY15. As we move forward, it is my hope that we can find other constructive ways to work together to build a new Virginia economy.”

The agreement will close the budget gap by:

  • Appropriating transfers from the Revenue Stabilization Fund, estimated at $470 million in FY15 and $235 million in FY16;
  • Establishing reduction adjustment targets for state agencies, higher education and local governments to address the shortfall, including:
    • State agencies are slated for $92.4 million in FY15 and $100 million in FY16
    • Higher education is set at $45 million per year during the biennium
    • Aid to localities is included at $30 million a year for the biennium
  • Setting the stage for $272 million in other actions in FY16 to be achieved through measures that the Governor will address when he introduces his budget amendments in December.
  • Allowing flexibility in capturing savings from available unexpected balances so that important priority items, especially in the areas of health care and economic development, are kept in place.

“Today’s agreement proves once again that it is not impossible for elected leaders to work together in order to address fiscal challenges, despite Washington’s best attempts to prove otherwise,” said House Majority Leader Kirk Cox. “This agreement is about protecting the financial integrity of Virginia and preserving Virginia’s reputation for sound fiscal management. This agreement cuts spending, but protects core functions of government like K-12 education and provides local governments with the flexibility they need to address this shortfall. Most importantly, we are not raising taxes or fees. We are setting priorities and making tough decisions just like Virginia families and businesses have to do.” ​

“As House Appropriations Committee Chairman, I have a fiduciary obligation to the people of the Commonwealth,” said House Appropriations Committee Chairman Chris Jones. “I take pride in our responsible stewardship of taxpayer dollars, especially during tough economic times. The actions taken today, and the bipartisan manner in which we have taken them, speak clearly to Virginia’s reputation as one of the nation’s best-managed states.”