Last week, Gov. Bob McDonnell gave the General Assembly money committees the good news: The commonwealth closed out its books June 30 with a $544.8 million surplus.
More than $310 million came from more revenues flowing to Richmond; the remaining $234 million came from state agencies exerting tighting control over their spending.
First, we need to give credit where credit’s due: Gov. McDonnell. For the second year in a row, Virginia’s ended its fiscal year in the black. In the throes of the Great Recession, for any state government wind up with a budget surplus, however small, is a major accomplishment.
But we would be remiss if we did not point out that surplus itself comes on the backs of local governments and at the expense of future state retirees, whose pension fund was raided in 2010 to close a gaping, multi-billion dollar deficit.
The state constitution requires the governor and General Assembly to produce a balanced budget. There’s no getting around that. But over the last decade, Richmond has done so by shafting local governments.
Since January 2009, local governments — including the City of Lynchburg — have been forced to remit millions of dollars to the state. Despite being forced by Richmond to carry out many of the responsibilities of state government — without any dollars to do so — local governments still must pay up what many local officials half-jokingly as “Aid to the Commonwealth.”
Lynchburg’s most recent “contribution” to state coffers amounted to more than $600,000, by the way.
Yet money from Richmond, given to localities to carry out state mandates has slowed to a trickle though the mandates are still in place.
State workers, too, have had the budget balanced on their backs when the Assembly “borrowed” more than $620 million from the Virginia Retirement System in early 2010, promising to pay it back with interest. This year, the state restored about $142 million, most of it for teacher pensions which are funded by the state and local school districts. McDonnell says he’ll send a portion of $18.7 million from the 2011 surplus to VRS, but he’s not saying how much.
“Borrowing” from current and future retirees. Forcing unfunded mandates upon local governments while simultaneously requiring localities to cough up yearly aid checks to Richmond. Shifting formerly state responsibilities to the local level with no accompanying dollars.
That’s how Richmond has been “balancing” its budget, following the letter of the constitution but not the spirit. The “surplus” is all well and good, but let’s admit how the governor achieved it. It’s a surplus based on little more than smoke and mirrors and a shirking of one’s duties.
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