Virginia has received national attention for its $403.2 million surplus in fiscal 2010, but Gov. Bob McDonnell found himself defending what he called “conservative budgeting” on Thursday.
Critics have attacked the surplus as budget gimmickry in a year in which revenue forecasts were revised lower three times and raised one time, and the state deferred nearly $140 million in payments to its retirement system in the fourth quarter.
In that vein, on the governor’s monthly radio show on WRVA Richmond, guest host Doc Thompson asked McDonnell essentially if it would be better to have more negative predictions so things turn out rosier than expected and the state ends up with a surplus.
But McDonnell said the General Assembly likes to balance the budget, and generally doesn’t like leaving a lot of money on the table. He noted that he and former Gov. Tim Kaine reduced spending by about $10 billion over the past two years because the revenue wasn’t there.
“We estimated fairly significant revenue declines, and that’s what’s happened,” he said. “I do believe in conservative budgeting, if you’re asking that question. I do think we ought to be conservative, both on revenues and on spending going forward, and if we happen to have a more robust economic recovery, which I’m doing everything I can with job creation initiatives to make happen, then we do have a surplus and we can decide for the future what we want to do with it, but conservative budgeting is what I’m going to continue to do.”
McDonnell also said that some of the approximately $87 million of undesignated surplus funds might be used to pay back some of the $620 million the state deferred to the retirement system in 2011 and 2012.
“We’re looking at everything from some capital expenditures in transportation to paying back the VRS loan that was made in ‘11 and ‘12, paying some of that back in advance,” he said.
