BUDGET SUMMARY
“On Sunday February 21, 2010, the House Appropriations Committee reported out the Amendments to HB30, the budget proposed in December by outgoing Governor Tim Kaine. These amendments reflect the consensus approach of House Budget writers as to the best method for balancing our two year budget, in order to address of potential $4 Billion shortfall in revenue forecast over the next two years. As you will see, the House had several parameters which dictated this approach. First, the House has followed the lead of Governor Bob McDonnell in refusing to balance our books on the backs of Virginia taxpayers, and there are no tax increases. The House also rejected the millions in fee increases in Tim Kaine’s proposal. Finally, the House has kept faith with irginia taxpayers by continuing to fund the state share of personal property tax relief payments to localities. As you read the attached summary of the major elements of the House Budget, you should not that reductions in funding to local school systems are dramatically smaller than those in Kaine’s proposal, reflecting the priority we have placed on public education. While every school system will see some reduction in expected state revenue, our public schools were held harmless to the greatest degree possible. Finally, there are significant long-term structural reforms in the way the Commonwealth will fund essential services. as we head into the final half of the 2010 Session, this budget represents the starting baseline for a conversation with our Senate counterparts, in pursuit of a consensus budget .”
Highlights of HOUSE Appropriations Budget Amendments
- Fully restored Car Tax Relief to taxpayers at cost of $950 million each year
- Rejected Kaine’s proposed statewide 17% increase in Income Tax Rates
- Eliminated from the budget all $145.8 million in new Fees from Kaine-proposed budget
- Limited the Impact of Kaine’s Dealer Discount Proposal – Compensation provided to retailers for collection of sales tax was removed only from those who file electronically (less than 1,800 retailers) while remaining 94,000 retailers retain 50% of the compensation they currently receive for collecting and remitting sales taxes at point-of-sale
- Used revenues identified in Mid-Session Reforecast to establish a fiscally responsible reserve of $165.0 million for the state’s Rainy Day Fund payments that will be required in the next biennium
- Included a total of $310 million each year in targeted K-12 cost reductions achieved by eliminating state mandates to local school systems and providing additional local flexibility
- These amounts are offset by over $270 million in local VRS savings annually
- Net impact on school divisions of approximately $40 million per year
- Amendments offer localities latitude to address reductions in manner that works for their jurisdictions by relaxing mandates relating to student-teacher ratios as well as by block granting certain programs
- Invested $54 million over the biennium in programs and tax credits that will create jobs across the Commonwealth, bolster our tax base and ensure Virginia remains the best state in which to do business
- Limited reductions in Health and Human Resources to about $210 million over the biennium while working to mitigate impact on the health safety net and providers with disproportionate share of Medicaid patients
- Amendments provide funding to lift the freeze on Medicaid home- and community-based waiver slots, including MR waivers, which impacts about 3,360 low-income elderly and disabled individuals
- Made restorations in the area of public safety and other constitutional officers
- Reductions to Commonwealths Attorney’s limited to 5%
- Reductions to sheriffs of less than 5% each year, including the restoration of funding to maintain the 1:1,500 ratio
Approximately 75% of cuts restored for Commissioners/Treasurers
- Made no additional reductions to base funding for higher education institutions in light of the scope of reductions they already have faced.
