Governor Northam announced Wednesday that the final number for Virginia’s budget surplus during the fiscal year that ended June 30 is $2.6 billion. Previous estimates were much lower.
This will be a bonus for Governor Ralph Northam when he crafts his budget proposal for the next two years. Passing the budget will no longer be his responsibility, however. It will be up to the General Assembly and the winner of November’s gubernatorial election to pass and execute Virginia’s next biennial budget.
“We have effectively managed Virginia’s finances through the pandemic, and now we are seeing the results—record-breaking revenue gains, a recovery that has outpaced the nation, and recognition as the best place to do business,” said Governor Northam. “Fueled by a surging economy, federal American Rescue Plan funds, and the largest surplus in Virginia history, we have significant resources available to make transformational investments in this Commonwealth. I look forward to working with the General Assembly in the fall to seize this opportunity so we can build a brighter future for all Virginians. ”
Virginia’s gubernatorial candidates differ in how they want to see the extra money be dispersed. “As Glenn said in March, Virginia families deserve a tax refund from this surplus,” said Macaulay Porter, a spokesperson for the Republican nominee Glenn Youngkin. “Investing in our kids and our schools, public safety, and infrastructure is the right thing to do.”
Democratic nominee Terry McAuliffe’s response was simple — education. “I have talked about this for a long time, we have always tried to do it on the cheap, we are 50 out of 50 states on average teacher pay compared to the average pay of our residents,” he said. “We need to invest in education. I think it is the single biggest thing we can do. If we do that, we build the best workforce in the country — businesses from all over the globe will come into Virginia.”
In addition to a new governor, all 100 House of Delegates seats will be up this November. The Democrats flipped 21 seats during Trump’s presidency and currently hold a 10 seat majority in the House. Republicans are hoping that a Democrat in the White House will help them drive turnout up and down the ticket so they can flip some of those seats.
Speaker of the House Eileen Filler-Corn’s office did not provide comment for this article. The Republican House Leader Todd Gilbert’s office said their caucus is still discussing legislative priorities for the surplus funds. “We’re still discussing specific legislation, but there’s no doubt that our proposals will be focused on helping families and small businesses recover from virtual education and unscientific lockdowns,” said Garren Shipley, a spokesperson for Gilbert.
Nearly half of the surplus funds are constitutionally required to be added to Virginia’s reserve fund for a rainy day. The process for determining the exact percentage of the surplus sent to the reserve is spelled out in Article X, Section 8 of the Virginia Constitution. According to Anne Oman, the staff director for the Appropriations Committee, if the surplus is finalized at $2 billion, that would result in $881 million going to the reserve fund. Northam will announce the finalized numbers in August.
This surplus is coming on the heels of Virginia receiving $4.3 billion of federal funds through the American Rescue Plan. This massive infusion of cash coming from the federal government is intended to be used as a COVID-19 stimulus package.
Governor Northam has called the General Assembly to convene on Aug. 2 so lawmakers can choose how to spend the money. According to sources with knowledge of the situation, Northam’s administration has asked the lawmakers for a legislation wish-list.
This infusion provides a cushion for lawmakers and the governor in 2022, whoever that may end up being.
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