Wednesday, Governor Bob McDonnell addressed the House and Senate Finance Committees about Virginia's $480 million budget surplus. He said the budget surplus and budget savings totaled $1.4 billion over the past three years.
“This is a bipartisan accomplishment, and not bad for any state in this uncertain economy. While the crafting of these budgets was hard fought over the past three years, the final product and good results were well worth the debate,” he said.
By law there are specific ways the budget surplus must be spent, but almost $80 million will be used to give eligible state employees a three percent pay increase by December 1, 2012. State employees have not had a raise in five years.
The governor also requested that accelerated sales taxes that applies to retail merchants be cut by $50.
The rest of the budget surplus will be doled out to other state services according to a state formula:
- about $78 million must be set aside for the Rainy Day Fund
- $30 million will go into a fund that would protect the state in the event the federal government slashes military spending, called "budget sequestration."
- More than $130 million will go to the higher education and non general fund accounts
- About $180 million will go to help clean up the Chesapeake Bay, the water quality improvement fund, transportation trust fund, and replenish money used during natural disasters that happened so far this year.