Virginia Gov. Bob McDonnell (R) says the commonwealth ended the last fiscal year with a surplus of nearly $545 million -- a bigger surplus than previously expected.
Last month, McDonnell said Virginia ended the year with a $311 million surplus. The new figure -- more than $200 million more -- reflects state agency savings and balances that were not reflected in the previous amount.
"And a lot of credit goes to the legislature and all of our state agencies for what they've done to manage budgets well, but primarily to the private sector that took the risks and grew the jobs and paid the income and sales tax revenues that have generated this revenue surplus," McDonnell says.
The governor says he will allocate $30 million of the surplus to a new reserve fund he's asking the legislature to create. It's to help the state deal with future federal spending cuts.
The reductions could be especially difficult for the Northern Virginia and Hampton Roads areas, which are particularly dependent on federal spending.
The biggest chunk of the surplus, $133 million, will be deposited into Virginia's rainy day fund. Roughly $19 million will go into the Virginia Retirement System.
Prior to the speech, Democrats called for restoring funds to education. The governor has since proposed adding nearly $64 million for education, more than $67 million for transportation, and the rest for the general fund and other services.
Democrats had very little criticism of the Governor after he spoke to the state's money committees. Senator Ed Houck applauded setting aside additional funds, and he's satisfied with the retirement system contribution.
"We have to make payments to VRS and we definitely should, so I think that's a prudent course that we said that we're going to do," he says, "and I think that we need to follow it now that we have the money."
Democratic Senator Janet Howell also likes the plan to appease the rating agencies, who earlier this month were threatening to downgrade bond ratings of some states as Congress battled over the debt ceiling.
"Right now, the markets and the bonding agencies are just looking at indications of what a state is doing," Howell says.