The Rust Report – January 20th

January 20, 2012

Thank you to those constituents who attended one of my three Town Hall meetings last weekend and participated in my teletown hall on Wednesday.  I enjoy the opportunity to have dialogue with residents about issues that are facing the Commonwealth.  These venues help me to better understand and represent the views of the residents.

This has been the first full week of the 2012 session, so I have been busy attending committee/subcommittee meetings, as well as meeting with people on bills which will come before me.  One of the ‘perks’ of being a legislator is that I learn a lot of things on a variety of subjects.  I try to look objectively at each piece of legislation before me and ask the ‘tough’ questions in order to discern the viability of a bill.  Some of the groups that have visited our offices this week include the Fairfax and Loudoun County Public Schools, Sierra Club, Virginia Citizens Defense League, Chesapeake Climate Action Network, Virginia League of Conservation Voters, Reston Interfaith and Northern Virginia Family Services.

 

Governor’s Budget

As promised in the last Rust Report, I wanted to take the opportunity to brief you on the Governor’s proposed budget.  During the next two months, the legislature will debate the proposed budget and make their recommendations.  A motto heard in the legislature is that the Governor proposes and the Legislature disposes! The debate will go on throughout the Session with the final budget being adopted the last three or four days of the session.

This is the largest budget in the history of the Commonwealth – $85 billion over two years!  The budget is composed of the General Fund (which comprises primarily the funds spent on education, health, human services and public safety; the legislature has the most control over this portion) and the Non-General Fund (which are dedicated revenues that the legislature has very little control over).  An alarming trend show that the General Fund portion of the budget has fallen to 41% (from about 50% 10 years ago when I was first elected), and the Non-General Fund has risen to 59%.

Where does the money come from?

  • Income Tax (66%)
  • Sale Tax (20%)
  • Corporate Tax (5%)
  • Miscellaneous (9%)

Where does the money go?

  • Education ($32.5 B)
  • Health & Human Resources ($25.5 B)
  • Transportation ($9.8 B)
  • Public Safety ($5.4 B)

The budget is built on several assumptions including:

  • Employment growth of 1.5% (normally we experience 5-6%)
  • Personal Income Growth of 3.7%
  • An average salary increase of 2.6%
  • No ‘Double Dip’ recession

In addition, Governor McDonnell has put $50M in a set aside fund which will be used if

necessary, to offset Federal cuts that may go into effect that will be devastating to Northern Virginia. The 2013-2014 budget also receives approximately $546 million in surplus which will carry over from the 2010/12 budget.

The ‘new’ spending in the 2012-14 budget includes the following major items.

  •  Medicaid Utilization plus inflation – $651 M
  •  Update costs of K-12 Standards of Quality -$378 M
  • VA Retirement Fund – $342 M
  • Rainy Day Fund – $300 M
  • Higher Education $204 M
  • Water  Quality Improvement Fund – $50 M

The total ‘new’ spending is $2.79 B

We are fortunate that Virginia continues to outperform most of the rest of the nation in economic development and job growth.  All this being said, the budget will undergo the scrutiny of the Appropriations Committee, and they will propose changes to the budget.  At the end of the session, a budget will be passed by the General Assembly and then the Governor will act.

 

Higher Education

As you may know, improving Higher Education in Virginia is very important to me; I serve as Chairman of the Higher Education subcommittee and on the Governor’s Higher Education Commission.  This week representatives from Virginia Tech, James Madison,  Northern Virginia Community College, William & Mary, The George Washington University and Randolph-Macon College came to visit me.  Their common theme was concern for adequate funding for higher education opportunities.

In the next Rust Report, I will review in some detail spending proposals and policy changes proposed for education.

I invite you to visit the General Assembly website to review the proposed legislation that the General Assembly will be voting on, to view the General Assembly sessions live each day beginning at noon, and take a virtual tour of the Capitol, among many other things. Of course, you are always invited to visit me in Richmond to see the legislative process first hand.

Again, please do not hesitate to contact me; I can be reached by phone at 804-698-1086 or by email at DelTRust@house.virginia.gov. You can also ‘like’ me on Facebook or follow me on Twitter. Thank you again for allowing me to serve as your Delegate – it is truly an honor.