Press Release
STATEMENT OF LIEUTENANT GOVERNOR BOLLING ON ADOPTION OF STATE BUDGET
-Bolling calls General Assembly's actions a "short term solution to a long term problem" and expresses concern over the use of one-time revenues and overly optimistic revenue projections to balance state budget-
Saturday, February 28, 2009Richmond - Lieutenant Governor Bill Bolling today issued the following statement in response to the General Assembly's adoption of amendments to the state budget:
"Needless to say, this has been a challenging budget year, with the Commonwealth facing a deficit of $3.7 billion. To address this shortfall we were facing significant spending reductions for most state programs. It appears as though the infusion of some $4.5 billion in federal stimulus funds will enable us to restore many of these budget cuts, at least in the short term. Given the significant infusion of funds provided by the federal stimulus package, I think the General Assembly did a good job crafting amendments to restore many of the budget cuts that had been made in the Executive Budget.
"However, I fear that this is a short term solution to a long term problem. While the Constitution of Virginia requires the Commonwealth to adopt a balanced budget, this budget is only balanced because of the extensive use of one-time revenues, such as those obtained from the federal stimulus package; the accelerated collection of the state sales tax from retailers; and the conversion of money that had been earmarked for one-time capital projects to long term debt.
"In addition, I am concerned that this budget is balanced by the inclusion of an overly optimistic revenue projection of 4.5% in the second year of the biennium which begins on July 1, 2009. While I hope that robust economic growth will return this year, the fact is that most economic indicators project continuing economic decline in the short term. If we fail to meet these overly optimistic revenue projections we could face significant budget shortfalls again next year.
"By relying on one-time federal funds and overly optimistic revenue projections to balance the budget, we are not addressing the fundamental structural problem in the budget. Simply put, we are spending more money than we are taking in and we cannot continue to do that. Unless we see significant economic growth over the next 18 months we will once again face massive budget shortfalls when the federal stimulus dollars, expire, other one-time budget balancing actions are repealed and revenue projections are adjusted to reflect economic reality.
"Going forward, our full attention must be directed toward effective proposals to get our economy moving again. We can do that by reducing taxes for families and businesses, eliminating unnecessary regulatory burdens, directing more resources to aggressively recruit new business and industry to Virginia and empowering the private sector to unleash the entrepreneurial spirit of America. That is what will ultimately get our economy moving again, not continual financial bail outs from Washington."
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For additional information contact Randy Marcus at 804-814-7117 (cell) or randy.marcus@ltgov.virginia.gov.
