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Preliminary figures show the state of Virginia finished its most recent fiscal year with a surplus of about $553.3 million, clearing the way for a pay raise for state employees and a contribution to the rainy day fund.
The fiscal year ran from July 1, 2014, through the end of June. A projected budget deficit of $2.4 billion over that fiscal year and the current one prompted state lawmakers to make several cuts to the budget in 2014.
But then revenue collections rose as the year progressed, according to a news release from Gov. Terry McAuliffe’s office. They climbed by 8.1 percent for the fiscal year thanks to increased tax collections and lower-than-expected tax refunds.
“Virginia’s significant revenue growth and preliminary year-end revenue surplus are a clear indication that our efforts to grow and diversify our economy are paying off,” McAuliffe said in the release. “While we still have more work to do to shield our economy from sequestration and federal cuts, there is no question that we are headed in the right direction.”
The surplus, which is the largest in the state’s history, triggered a provision in the current fiscal year’s budget that gives full-time state employees a 2 percent pay raise. School divisions will receive the state’s share of a 1.5 percent pay raise for all public school jobs required by the state’s Standards of Quality. State employees will see the raise beginning with their Sept. 1 paychecks.
“These budget numbers are clearly good news, but I intend to maintain a conservative approach as my team and I formulate our next state budget,” McAuliffe said in the release. “I look forward to introducing a budget that maintains our Commonwealth’s fiscal stability while making smart investments in education, workforce development, transportation and health care that will be the foundation for a new Virginia economy.”
Of the surplus, 96 percent will go to the Revenue Stabilization Fund — the rainy day fund — and the Virginia Water Quality Fund. That fund is used to help pay for projects that work to curb pollution of the Chesapeake Bay and its tributaries.
Bill Howell (R-28), the speaker of the House of Delegates, joined McAuliffe in calling the surplus a positive.
“It is the result of the Republican-led General Assembly’s responsible, conservative budgeting,” Howell said in a news release. “The General Assembly acted quickly last fall to close a projected budget shortfall, protecting our Triple-A bond rating and putting the Commonwealth back on solid financial footing.”