FRIDAY, FEBRUARY 13, 2009
Contact: Claire Wilker (352)445.9000
House Republicans Pass Budget with $133 Million Shortfall
~Balanced Budget Required by Virginia Constitution~
For the first time in its history, the House of Delegates voted yesterday for a budget requiring deficit spending, violating Virginia's Constitution. The deficit results from an amendment proposed by the Republican controlled House Appropriations Committee, Item 3-1.01 #3h, which proposes a transfer to the general fund of $149 million dollars from a supposed cash balance in the Department of Environmental Quality's Water Quality Improvement Fund.
According to the Commonwealth Accounting and Reporting System, the official system used to track all state expenditures, the Water Quality Improvement Fund balance as of Thursday, February 12th was $137,718,715.00. Bills for projects under this Fund continue to come in on a weekly basis. These projects are already under contract, under construction, and in many cases, nearing completion.
Between now and June 30th the Commonwealth will receive bills for an additional $121 million which it is contractually obligated to pay. The balance in the Water Quality Improvement Fund is expected to be a mere $16 million by June 30th.
"The budget passed by the House yesterday effectively has a $133 million dollar hole in it," said House Minority Leader Ward Armstrong. "Including this amendment and passing this budget is highly irresponsible deficit spending. Virginia takes pride in its long tradition of passing balanced budgets as required by our state Constitution. We don't need the practice of deficit spending coming across the Potomac into our Commonwealth."
The budget amendment authorizes the use of bonds to However, every single dollar of bond money has been committed by the Commonwealth in contracts for other projects.
The amendment also stipulates that the transfer to the General Fund will not be made if the Commonwealth receives federal funds from a federal stimulus package. However, based on reports from Washington, it appears that Virginia will only get about $81 million in clean water funding from the federal stimulus package. Even if this money could be used to back fill the raid on the Water Quality Improvement Fund, the budget would still be $68 million dollars short. In addition, federal restrictions prohibit federal stimulus funds from being used for projects already funded and under construction. Therefore, federal stimulus funds could not be used to plug the budget deficit.
