Virginia posts $311 million revenue surplus for fiscal year 2011

RICHMOND – For the second straight year, the Commonwealth of Virginia has reached the end of the fiscal calendar in the black. Governor Bob McDonnell announced today that the state concluded Fiscal Year (FY) 2011 with an approximately $311 million surplus from general fund revenue collections and transfers. Total revenue collections rose by 5.8% in FY 2011, well ahead of the revised revenue forecast 3.5% growth. The main drivers of the revenue increase were growth in individual income tax receipts from both payroll withholding and non-withholding, key economic indicators.  A comprehensive breakdown of the FY 2011 revenue surplus is attached to this press release.

The final FY 2011 surplus number will be adjusted upward in the month ahead after the addition of final tabulations of savings recognized through greater operational efficiencies and incentives to control spending throughout state government. In FY 2010 the revenue surplus for the year was $228 million. The final FY 2010 surplus, including savings, was $403 million. The final surplus figure for FY 2011 will be released in August. The governor made today’s announcement at an afternoon press conference at the Patrick Henry Building on Capitol Square in Richmond. He was joined by Lieutenant Governor Bill Bolling and Secretary of Finance Ric Brown. It’s the second fiscal year in a row that Virginia has concluded the fiscal year with a revenue surplus. This is also the first year since 2008 that there has been actual revenue growth over the previous year.

 

“The great challenge of our time is getting our economy back on track, putting our people back to work, and getting our fiscal houses in order at the local, state and federal levels,” Governor McDonnell said. “For too long, elected officials from both parties have overpromised and overspent, and the result is the fiscal crisis we see unfolding in Washington D.C. Here in Richmond, we are committed to implementing a culture of fiscal responsibility and restraint in our state government. Working together, Republicans and Democrats have made some very tough choices. We have reduced spending, not raised taxes and focused government on its core functions. As a result, we have seen back-to-back years of revenue surpluses. The Commonwealth, like our families and businesses, is living within its means.”

 

The governor continued, “Many factors have led to this surplus. We have budgeted conservatively and we have kept taxes low. Additionally, our targeted investments in job-creating programs in the areas of economic development, transportation and higher education, along with our strong Right to Work law, pro-business environment, and commitment to keeping litigation and regulation to a minimum, have continued to make Virginia more and more attractive to job-creating businesses. Our unemployment rate has now fallen to 6 percent, the third-lowest rate east of the Mississippi, and more Virginians are working again. As Virginians work and spend, it translates into increases in incoming revenues to the Commonwealth. State government must continue to do its part to control spending and look for new opportunities to innovate, restructure and save taxpayer dollars. We still have much work to do before we are completely out of this tough economic period, and unfortunately federal issues continue to threaten the positive advances we are making in the states. It is great to see revenue growth return to the Commonwealth after 2 years of declining general fund revenue collections. Clearly the bipartisan effort in Richmond to rein in spending and rev up the private sector is producing positive results. Despite the positive news, no one should believe Virginia’s fiscal challenges are over. Virginia faces massive unfunded federal mandates of over $10 billion in environmental, health care and mental health requirements and significant unfunded state liabilities in the unemployment insurance system and state retirement system.

 

Lieutenant Governor Bill Bolling added, “Needless to say, we are delighted to have closed the most current fiscal year with a $311 million revenue surplus.  This surplus, in addition to last year’s budget surplus, means that we have enjoyed total budget surpluses of more than $700 million during the first two years of our Administration.  This is a very positive result, which is much better than most states in the nation.  It is a significant improvement over where we were when we took office.  While we can be pleased with the success we have enjoyed in getting the Commonwealth’s financial house back in order, we will continue to face significant budget pressures in the years to come, most significantly the uncertain economic environment on a national basis.  Therefore, we must continue to be frugal with how we spend the taxpayer’s money, and we must direct those resources we have to the state’s highest priorities and to addressing some of the structural challenges we face in other areas, such as VRS.  If we continue to exercise fiscal discipline and focus on creating jobs and growing our economy, I am hopeful that we will continue to experience positive economic news such as this in the future.”

 

At today’s press conference, Secretary of Finance Ric Brown detailed the sources of the surplus funds and where they will be directed.  The overwhelming majority of the revenue is obligated to predetermined areas of the state budget due to the Virginia Constitution and state law which governs revenue allocation in the event of a surplus. Governor McDonnell will also direct funds to shoring up the Virginia Retirement System as part of his ongoing effort to reform and improve Virginia’s pension system to ensure its long-term viability.

 

Disbursement of FY 2011 Revenue Surplus (All numbers are approximate and subject to revisions):

 

$146.6 million: Revenue Stabilization Fund Deposit from FY2011 Surplus (Subject to Final Audit)

$32.2 million: Water Quality Fund

$23.0 million: Pay Transportation for its Share of the Accelerated Sales Tax

$8.9 million: Interest on Unemployment Compensation Trust Fund Due to Federal Government

$4.3 million: Tornado Relief

$7.5 million: For Base Realignment and Closure (BRAC) Obligations

$7.4 million: Supplemental Public Safety Funding for Sheriff’s Offices

From Remaining Funds:  Additional Contributions to the Virginia Retirement System to Help Ensure Long-Term Viability and Stability of the System and to Transportation Infrastructure

Virginia posts 17.9% revenue growth in May

From Governor Bob McDonnell's office:

Governor Bob McDonnell announced today that May revenue collections increased by 17.9 percent over the prior year. This is the fourteenth month out of the last 15 in which state revenue collections exceeded the previous year’s amount. It is the sixth out of the last seven in which year-over-year revenue growth was greater than 9 percent.

The revenue increase was primarily driven by a 49 percent increase in nonwithholding receipts (individual final payments based on 2010 tax liabilities). On the other hand, growth in two large sources, payroll withholding and sales tax, slowed.  On a year-to-date basis, total revenue collections have risen 5.8 percent, slightly ahead of the revised annual forecast of 3.5 percent growth. Adjusted for the accelerated sales tax program, state revenues have grown 7.3 percent, ahead of the forecast of 5.5 percent.

Speaking about the latest revenue report, Governor McDonnell noted, “The growth in state revenue is a positive sign that Virginia’s economy continues to improve.  However, while 17.9 percent revenue growth is great news, it does not mean we have fully turned the corner from the deep and long-lasting recession that has impacted every Virginian.  Like some national economic indicators, our payroll withholding and sales tax collections slowed last month. This means there is still much work to be done before we find ourselves with the full and robust economic recovery our Commonwealth and nation needs.”

The governor continued, “Even though our revenue collections continue to increase month after month, too many Virginians are still out of a job. That is unacceptable. We must work to ensure that every Virginian can find a good-paying job to support their families and afford the goods and services they need to live a healthy, happy life.  While more Virginians are back to work, families and businesses still face high gas prices and increasing commodity prices, forcing them to tighten their belts.  Just as families are doing, our administration will continue to reign in government spending, better utilize hard-earned taxpayer money, and exercise fiscal responsibility in managing the state.  At the same time, we remain committed to putting in place aggressive policies that encourage economic growth, help bring private sector jobs to every region of this state, and get our economy turned around for good.”

The May revenue numbers are available at this link: http://www.finance.virginia.gov/KeyDocuments/RevenueReports/FY2010-2011/May2011RevenueLetter.pdf

More jobs for Virginia ... Sabra hummus & veggie dips manufacturing plant

Governor Bob McDonnell cut the ribbon today at a new state-of-the-art manufacturing plant in Chesterfield County. Sabra veggie dips, spreads, and hummus, will be manufactured at the new facility the created 260 new jobs.

The press release from the Governor's office:

Governor Bob McDonnell traveled to Chesterfield today for the official ribbon cutting ceremony opening Sabra Dipping Company’s new food manufacturing plant. The plant will make Sabra branded dips and spreads, including the country’s best-selling Sabra hummus and vegetable dips. The opening of the plant will create 260 new jobs. Sabra’s decision to move to Virginia was announced by former Governor Tim Kaine in November 2008.

Speaking about today’s ribbon cutting ceremony Governor McDonnell noted, “I want to thank my predecessor, Governor Tim Kaine, for his successful effort to bring this great international company to Virginia. Working with the Virginia Economic Development Partnership, the Kaine Administration was aggressive and proactive in convincing Sabra to choose the Commonwealth over two other states that were under consideration for this same project. The result is 260 new jobs in the Richmond/Tri-Cities area, and this Administration was pleased to be a part of the finalization of the venture over the last few months. I look forward to working with Sabra in the years ahead, and I welcome this great corporate partner to Virginia. As Governor I will be vigilant in ensuring that the Commonwealth remains a great, pro-business host for Sabra and all our job-creating employers. We will do that by keeping taxes low, regulations and litigation at a minimum and putting in place the policies our private sector employers need in order to grow and be successful. The number one priority of our Administration is job creation, and today is another positive step forward in this effort.”

From the Initial Announcement in 2008:

Sabra Dipping Company, LLC of Astoria, New York, makes a wide range of refrigerated dips and spreads using fresh herbs and spices, and authentic recipes and healthy vegetables. All of the products are certified kosher and vegetarian and available across the nation.

Sabra Dipping Company was formed as a U.S./Canadian joint venture between Strauss Group and PepsiCo. The Sabra joint venture draws on both Strauss Group and Frito-Lay North America’s marketplace expertise to continue building this growing business. Frito-Lay is a business unit of PepsiCo. This will be the first new facility built since the formation of the Sabra Dipping Company joint venture.

Strauss Group (TASE: STRS), Israel's second largest food and beverage Group, has over the past few years become an international corporation with a steadily growing part of its business conducted outside of Israel. The Group employs more then 11,000 people and operates in nineteen countries. Over the last five years, the Group has consistently achieved double-digit growth, doubling its business in that period and generating NIS 6 billion (around $1.7 billion) in turnover at the end of 2007, of which 45 percent originated in international activities. The Group focuses on key consumption trends in the food industry via three business divisions: Health & Wellness, Fun & Indulgence, and Coffee.

The Group collaborates with a number of leading multinationals –PepsiCo and Lavazza – and is traded on the Tel Aviv 25 Index.

The Group has cultivated its coffee business extensively and is among the top ten players in the world's coffee markets with operations in 11 countries, and is one of the largest corporations in the emerging markets of Central and Eastern Europe and the second largest in Brazil. The Group's global fun and indulgence activities have focused around the development of a unique line of chocolate bars under the Max Brenner brand. In North America, the Group's health and wellness business is being led by Sabra. For more information, please visit www.strauss-group.com.

Frito-Lay North America is the $11 billion convenient foods business unit of PepsiCo, which is headquartered in Purchase, New York.

PepsiCo (NYSE: PEP) is one of the world's largest food and beverage companies, with 2007 annual revenues of more than $39 billion. The Company employs approximately 185,000 people worldwide, and its products are sold in approximately 200 countries. Its principal businesses include: Frito-Lay snacks, Pepsi-Cola beverages, Gatorade sports drinks, Tropicana juices and Quaker foods. The PepsiCo portfolio includes 18 brands that generate $1 billion or more each in annual retail sales. PepsiCo's commitment to sustainable growth, defined as Performance with Purpose, is focused on generating healthy financial returns while giving back to communities the Company serves. This includes meeting consumer needs for a spectrum of convenient foods and beverages, reducing the Company's impact on the environment through water, energy and packaging initiatives, and supporting its employees through a diverse and inclusive culture that recruits and retains world-class talent. PepsiCo is listed on the Dow Jones Sustainability North America Index and the Dow Jones Sustainability World Index. For more information, please visit www.pepsico.com.

The Virginia Economic Development Partnership worked with Chesterfield County, the Greater Richmond Partnership and Virginia’s Gateway Region to secure the project for Virginia. Governor Kaine approved a $350,000 grant from the Governor's Opportunity Fund to assist Chesterfield County with the project. The company is eligible to receive state benefits from the Virginia Enterprise Zone Program, administered by the Virginia Department of Housing and Community Development. The Virginia Department of Business Assistance will provide training assistance through the Virginia Jobs Investment Program.

James Atticus Bowden: "Let's fix Virginia first. Now."

The latest edition of Bacon's Rebellion e-mag includes Jim Bowden's commonsense advice about how to get back on the economic high road.

In Fix Virginia First -- What to do after an economic bubble bursts, writes that it is not rocket science ... it is Economics 101:

We must fix Virginia, first, for more, better economic opportunity – to enable, expand and enhance personal freedom for the individual to chose where and how he works, lives, plays and raises a family.

Read the entire article here.