Ken Plum: Budgeting the sate’s resources

ken plumIn contrast to the federal government’s method of budgeting, the budget for the Commonwealth of Virginia is more than balanced. The state Constitution prohibits the borrowing of money for operations, and it requires a “rainy day fund” of reserve monies that can be drawn upon in an economic downturn. That is in part why the state has a perfect AAA bond rating giving it the best terms when monies are borrowed for capital projects.

Both the House and the Senate have completed work on their versions of the budget that was proposed by Governor Ralph Northam earlier this year. The two budgets will be reconciled in a conference committee that will resolve differences between the two. Total spending for the biennium will be about $48 billion in general funds raised through taxes. Individual and corporate income taxes provide three quarters of the revenue with sales tax providing about seventeen percent and additional smaller taxes making up the rest. General funds coming from taxes make up about 36 percent of total revenue. Non-general funds that consist of fees such as motor vehicle and gas taxes, college tuition, federal grants and other fees make up 64 percent of the budget.

Noteworthy features of the House and Senate budgets that are being reconciled and are subject to change before a final budget is adopted include a much needed increase in rates for personal care providers in Medicaid programs, an increase in developmental waiver disability slots by 1,135 in the Governor’s budget to 1,635 in the Senate version of the budget. While the increase will help, the number of persons on the waiting list still number in the thousands. The Governor and the House budgeted for 630 supportive housing slots for persons with serious mental illness while the Senate provided 1,630. Budget language provides for the establishment of a state-based exchange for health insurance.

The budgets of both houses provided for teacher raises as did the Governor’s budget. The amount differs in each with an expected three to four percent over the biennium. The ratio of counselors to students in the public schools will be improved. The Governor proposed a ratio of one counselor per 250 students. The House ratio is 325 and the Senate’s is 300. Likewise, the ratio of teachers for English learners will be improved. A major point of contention among the Governor’s and the House and Senate budgets is that only the House has proposed to restore the cost to compete funding for Northern Virginia schools because of the high cost of living in the region. The average per pupil direct aid for public school students ranges from $6,206 in the Governor’s budget to $6,297 in the House budget.

A major emphasis in the budget is an increased investment in preschool education that was championed by the First Lady. The Governor’s “Get skilled, Get a job, Give back” (G3) funding to provide tuition assistance to low- to moderate-income students who meet certain criteria is receiving significant funding. The Housing Trust Fund will receive a much-needed infusion of cash proposed in all the budgets.

For information comparing the three budgets, go to Budget Comparison.

Ken Plum is a member of the Virginia House of Delegates.



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