Bolling and McDonnell Unveil Budget and Spending Reform Plan

Plan Highlights Need for Fiscal Responsibility in Richmond, Calls for Accurate Revenue Forecasting, Spending Restraint, Reform of the Budget Cycle and Increased Transparency in State Government

 

RICHMOND- Bob McDonnell, Republican gubernatorial nominee and former Attorney General of Virginia, and Lieutenant Governor Bill Bolling today unveiled their plan to bring greater fiscal responsibility to Richmond through budget and spending reform.  McDonnell and Bolling announced the plan during a press conference call this morning.  Building off of the "Good Government" plan the two unveiled in May, today's proposals continue their promise to make Virginia's government more open, transparent and accountable over the next four years. 

 

Highlights of the McDonnell-Bolling Fiscal Responsibility Plan Include:

• Committing Richmond to accurate revenue forecasting done in a realistic, accurate and conservative manner
• Reforming the Rainy Day Fund, including increasing the permissible size from 10% to 15% of the state budget

• Enacting the budget cycle reforms recommended by the Wilder Commission

• Implementing evidence based budgeting process
• Improving government transparency and setting new standards for accountability
• Instituting performance audits of major agencies
• Standing up for Virginia against unfunded federal mandates
• Transforming the State Internal Auditor position into an Inspector General
• Establishing a Government Performance Commission to review Idle Assets
• Implementing performance spending

 

     Speaking about his plans to dramatically increase fiscal responsibility in Richmond, Bob McDonnell remarked, "We are going through some very tough economic times. These tough economic circumstances have forced the Governor to make serious and difficult cuts to Virginia's budget. Unfortunately, state spending has increased in recent years at a pace not in line with the overall economy. As the economy has slowed down we have come face to face with a serious divide between what the state has been spending, and what incoming revenues will actually allow for. While my opponent supports increasing taxes on Virginians during this recession in order to increase available revenue in Richmond, that's not the correct path to take. It is irresponsible and fiscally reckless to ask Virginians to pay more in taxes as they face the toughest economic conditions in generations. The correct answer to these tough circumstances is budget prioritization, spending restraint and fiscal responsibility. As Attorney General I cut my office's budget by 14%, took a pay cut and gave back my state car.  Those are the kinds of tough decisions Virginians expect to see out of our state government.  In a McDonnell Administration, we will make the tough decisions necessary to prioritize within the existing budget, keeping economic development, education, public safety and transportation among the top priorities.  And we will do so without raising taxes."

 

     McDonnell continued, "We must put an end to the roller coaster spending by Richmond. That will require exercising spending restraint, not just in bad times, but in good times too.  To do this we will implement accurate revenue forecasting and not make overly optimistic revenue projections.  A 2006 report by JLARC, The General Assembly's version of the Congressional Budget Office, noted that of the 50 states, Virginia had the second largest forecasting errors in state budgets.  That is unacceptable. A failure to forecast correctly leads to a failure to allocate state funding correctly, and eventually leads to the situation we face today: spending not in line with incoming revenue, necessitating difficult, immediate cuts.  We also have to do a better job preparing the Commonwealth for tough economic times. As Governor, Doug Wilder led the way for creation of our state Rainy Day Fund.  It is a crucial resource to help state government weather tough times. I will call for an increase in the allowable size of the Rainy Day Fund, to help further buttress the Commonwealth against the difficult times that we must always be prepared for. Governor Wilder also called for a reform of Virginia's budget cycle. We need to move the budget system to odd years, allowing a Governor to oversee two biennial budgets, providing for a greater continuity in spending and planning. Finally, we need to make Virginia's government more transparent. We will improve government transparency and set new standards for accountability so Virginia citizens can see where their money is being spent.  And finally I will continue to stand up for Virginia against unfunded federal mandates that burden our taxpayers. A Governor's job is to do what is right for their state. When Congress attempts to pass measures that will hurt the Commonwealth's taxpayers, I will not hesitate to oppose them. This election is about jobs and the economy.  As Governor I will do everything I can to get Virginia's economy moving again and help create the new jobs we need. A key component of ensuring that we are successful will be our ability to successfully get state spending under control, prioritize within our state budget, make reasonable revenue projections and ensure that Virginia citizens know where their money is going and what it is being used for. "

 

     During today's press conference call with reporters, Lieutenant Governor Bill Bolling stated, "Virginia has long been known for its fiscal integrity. However, in the past few years we have based our budgets on overly optimistic revenue projections; one time money to pay for ongoing government programs, spiraling amounts of state debt, raids on the Rainy Day Fund and federal bailout dollars. We have missed our revenue projections by 20% points and incurred over $7B in budget shortfalls with more on the way. The result has been millions of dollars of budget cuts in important programs like education, public safety and health care and the loss of 2000 state jobs. We have to reverse this dangerous cycle and we have to do it now. Under a McDonnell/Bolling administration, we will base our budgets on realistic revenue projections, we will eliminate the budget gimmicks and we will not spend more than we can afford. The proposals we announce today will help restore fiscal integrity to state government by strengthening the budget process, enabling us to save more money in good economic times, ensuring that taxpayer money is being spent as efficiently as possible, and improving budgetary transparency. These are the type of reforms we must implement to protect our reputation at the best managed state in America and our AAA bond rating."