June 6, 2023

State Budget Surplus

Dear Fellow State Employees :

Thanks in great measure to your hard work and dedication to efficient and effective government, I will formally announce today that, for the third year in a row, the Commonwealth finished the fiscal year with a budget surplus that includes both revenue and savings. This total surplus of $448.5 million is comprised of the $129.2 million in revenue that I previously announced, plus $319.3 million in savings from unspent general fund appropriations, recoveries, and non-general fund balances. I am pleased to share with you in advance of my public announcement that $187 million in savings, largely due to your continued dedication to spending taxpayer resources wisely, made up the largest portion of the surplus total. To be clear, the largest share of this surplus would not have been possible without the hard work and ingenuity of state employees.

As I announced at my employee town hall last December, my introduced budget included a bonus for state employees, the payout of which was partially dependent on agency savings through innovation and frugality, the same principles applied in the private sector. I recommended an up-to-3% performance bonus, provided that we achieved a state revenue surplus and that agencies returned savings to the Commonwealth. Obligations to the Revenue Stabilization Fund, the return of Transportation’s share of the accelerated sales tax, and the equally mandatory deposit to the Water Quality fund had first call on certain surplus funds. Thanks directly to additional efforts by you and your fellow state employees to save rather than spend down year end balances, the Commonwealth has saved enough to provide for the $77.2 million general fund share of the 3% bonus. This bonus will be paid out on December 1 of this year to all classified employees of the Executive branch and other full-time employees of the Commonwealth.

This is the second time I’ve asked you to rise to the same challenge given to private sector employees across all sectors of the economy. In FY2010 incentives were put in place to end the practice of spending appropriated funds down to zero at the end of the fiscal year and instead identify ways to save state money to receive a one-time 3% bonus. In response to that challenge, in FY2010 we accumulated $174.7 million in savings and unspent balances and you were awarded with a year-end bonus. When I asked you again to generate savings at the end of last year, I had no doubt you would rise to the challenge; however, you exceeded expectations by saving $12.3 million more than in 2010. The culture of prudent use of public funds that we have created, in addition to the historic 2012 reforms to preserve the Virginia Retirement System, will be lasting legacies that we share.

As always, thank you for the world class customer service you exhibit daily for our citizens and thank you for your continued service to the Commonwealth.

Governor Bob McDonnell

About Brynn Boyer

Brynn Boyer is assistant director of media and public relations and a 2010 graduate of UMW.