Restoring Fiscal Integrity to Government

Virginia has long been recognized as one of the best managed states in the nation.  However, when Governor McDonnell and Lieutenant Governor Bolling took office Virginia was facing a $6 billion budget shortfall.  This budget shortfall had arisen because the state had continued spending at historic levels in the face of a declining economy.  That had to change.

In addition, the budget that had been introduced by the outgoing Governor included a $2 billion tax increase.  Governor McDonnell and Lieutenant Governor Bolling believe that budgets should be balanced by reducing spending and reprioritizing state programs, and they refused to increase taxes on Virginia families and businesses in the midst of the worst recession in 60 years. 

To restore fiscal integrity to the Commonwealth, the McDonnell/Bolling Administration:

• Reduced state spending to 2006 levels
• Reprioritized state spending, directing limited state resources to the core responsibilities of state government
• Focused state investment on core functions that best lead to private sector job creation - higher education, transportation and economic development.
• Implemented hiring freezes and incentivized state employees to save taxpayer dollars
• Eliminated the tax increases that had been proposed by the outgoing Governor

As a result of these efforts, Virginia has once again emerged as a national leader in responsible fiscal management.  The results of the McDonnell/Bolling Administration’s efforts to restore fiscal responsibility to state government include:

• Eliminated a $6 billion budget shortfall without raising taxes
• Generated a $403 million budget surplus in the first 6 months of the administration
• Protected the Commonwealth’s coveted AAA bond rating
• Set an example for the rest of the nation on how state finances should be managed

In addition to solving today’s challenges, Governor McDonnell and Lieutenant Governor Bolling are committed to fundamentally reforming how government works for the future.  Other tax, fiscal and budget reforms include:

• Expanding job creating tax reforms to reduce the tax burden on businesses that create jobs and increase economic activity in Virginia
• Reforming the state budget cycle to prevent lame-duck governors from introducing “political” budgets that must be managed by a new, incoming Governor.
• Increasing the amount of money the state can save during periods of revenue surpluses to better position Virginia to deal with the periods of revenue shortfalls

Additionally, to continue to build on these successes, Governor McDonnell has established the Government Reform and Restructuring Commission to provide recommendations over the next several years to further restructure, consolidate, and reform government operations.

Virginia continues to face budgetary challenges, but the McDonnell/Bolling Administration’s success in turning budget shortfalls into surpluses without raising taxes, prioritizing spending and reforming government has put Virginia back on a sound financial foundation and provided a blue print to the nation on how to make government do more with less.