- The Washington Times - Thursday, August 27, 2015

Virginia’s brightening economic picture offers a chance to spend more money on “investments” in education, Gov. Terry McAuliffe said Thursday, hinting that the state’s decadelong trend of bigger budgets could continue next year.

Delivering an update on the state’s finances to the General Assembly’s money committees, Mr. McAuliffe said Virginia is starting off with a clean slate this year after facing a projected $2.4 billion budget shortfall through June 2016 at this time last year.

“With increased resources you provided in the state budget, my team and I have worked tirelessly to move this commonwealth forward and to compete more effectively in this fast-changing 21st century economy,” the Democratic governor said in prepared remarks.

He said that taking into account end-of-year transfers, the state’s $550 million revenue surplus in the year ending June 30 translated to new general fund monies of $536.2 million, all of which is obligated to things like the rainy day fund and water quality fund.

“So we start off this year with a clean slate,” he said in his remarks.

The current two-year budget totaling about $95.5 billion is a $9.5 billion increase over the last one, signed by Mr. McAuliffe’s predecessor, former Gov. Bob McDonnell.

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That’s the biggest increase since the boom times of the mid-2000s, when then-Gov. Mark R. Warner cajoled lawmakers into approving a $1.4 billion tax increase in 2004 to close a $6 billion gap in the state’s finances. (Mr. Warner today is a U.S. senator.)

The two-year budget was $51.4 billion for 2003-2004, about $61.2 billion in 2005-2006, and about $71.1 billion in 2007-2008.

The growth then slowed amid the downturn, increasing to $74.2 billion in 2009-2010, $79.3 billion in 2011-2012, and $86 billion in 2013-2014.

More recently, Mr. McDonnell shepherded a $3.5 billion transportation package through the legislature in 2013, and his outgoing budget proposal in December 2013 was actually slightly larger than what lawmakers ended up passing.

Mr. McAuliffe acknowledged Thursday that he hasn’t gotten everything he’s wanted. When the Republican-controlled legislature amended the current two-year budget earlier this year, it axed about $44 million in new debt and fees he had proposed to close the shortfall and gave him less than what he wanted for a fund his office can use to lure businesses to the state. Lawmakers also have rebuffed his multiple attempts to expand Medicaid under Obamacare.

For some, though, the current levels aren’t enough.

The Commonwealth Institute for Fiscal Analysis, a left-leaning think tank in Richmond, issued a recent report estimating that state support for K-12 schools has fallen 14 percent — or $884 million — compared to 2007 levels when adjusting for inflation and rising enrollment. Support for higher education, adjusting for increased cost and population growth, is down 27 percent, or $650 million.

“Virginia is a high income state that used to proudly support top-quality schools and colleges. But in recent years policymakers have pulled back from this commitment, allowing schools and services to languish from insufficient state revenue,” said Michael Cassidy, president and CEO of the Commonwealth Institute. “We can’t afford to continue down that path.”

Mr. McAuliffe hinted at more of his spending plans to come in December, when he will have his own opportunity to lay out his budget blueprint for the two-year period starting July 1.

He acknowledged that 5,000 K-12 positions have been lost since 2008 and that state spending on direct education is just now getting back to pre-recession levels.

He said more spending won’t solve everything, but that he intends to include “significant forward-looking investments” to modernize the state’s education system and prepare students for the future, and he also called for action on fixing health care in the state.

“Despite the uncertainties that we confront today, we are still in an enviable position,” he said. “And if we can work together now that the economy is stronger, imagine what we can accomplish. We have the opportunity to make major investments that will yield benefits for generations.”

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