BRADENTON, Fla. — Virginia Gov. Bob McDonnell Wednesday laid out his legislative agenda to a joint session of the General Assembly, saying he would focus more spending on education, transportation and underfunded pensions.
McDonnell also said he would push for placing more than $600 million in reserves by the end of fiscal 2014 and allocating $50 million to create a new Federal Action Contingency Trust Fund to help weather impacts from potential federal spending cuts.
“While we cannot control what Congress or Europe do, we must prepare as well as possible for the future changes that are certain to come,” he said. “That is what I have tried to do in the introduced budget.”
TheRepublican governor said his $85 billion spending plan for fiscal 2013-14, introduced in mid-December, is structurally balanced and does not raise taxes. His ideas were “received well” during presentations to rating agencies last week, he told legislators.
Virginia’s general obligation bonds are rated triple-A by the three major agencies.
While McDonnell did not unveil any borrowing plans to lawmakers, his proposed budget includes more than $323 million of bonds for college and university capital projects.
McDonnell told lawmakers that he wants to increase funding for K-12 education by $438 million over the biennium to strengthen the Virginia Retirement System for teachers and school employees, and to increase primary education funding in general.
“I agree with President Obama that we need to expand charter schools in our nation,” he said, adding that his proposals would require a portion of state and local student funding “to follow the child to an approved charter school” and make it easier for new charters to be approved and acquire property.
The governor outlined a series of funding policy changes aimed at providing additional revenue to the state transportation program for new projects and maintenance.
“I am proposing that we close a prison, cut ineffective programs, abolish unnecessary boards and commissions, eliminate and consolidate agencies, end memberships in dozens of outside organizations, and make government work smarter,” McDonnell said. “It is also time that we address, head on, the hard realities of our woefully underfunded state pension system.”
According to a pension system review in December, liabilities of the Virginia Retirement Systems increased last year to $19.9 billion from $11.8 billion in 2009. McDonnell called the unfunded problem “unsustainable,” and released a reform package Thursday that included increasing employee contributions to 6% from 5%, and eventually capping annual cost-of-living increases at 3%.
If adopted by the General Assembly, McDonnell said his pension recommendations would inject more than $5.8 billion in pension savings over the next 21 years.
The legislature is in session through March 10.