RICHMOND, Va. -- Virginia Governor Terry McAuliffe announced "our economy is back" Monday morning when he said Virginia ended the fiscal year with the largest budget revenue surplus in state history -- $553.3 million. The surplus will result in two percent pay raises for state workers, the governor said.
"I am proud to say all state employees will get a raise and will see that in the check they get on September 1," Governor McAuliffe said.
The governor's office released details about the raise in a statement following the press conference:
Full-time, classified state employees, faculty at public higher education institutions, judges and justices of the Judicial Department, state-supported locally elected Constitutional officers and their full time staffs, such as deputy sheriffs, local health departments and social services offices, full-time community services boards’ staff and other eligible state-supported employees will receive the 2 percent raise. Additionally, local school divisions will receive funding to provide the state share of a 1.5 percent pay increase for all public school positions required by the Standards of Quality. The pay increases for state employees will be reflected in state employees’ September 1, 2015 paychecks.
"Virginia’s significant revenue growth and preliminary year-end revenue surplus are a clear indication that our efforts to grow and diversify our economy are paying off," Governor McAuliffe said. "While we still have more work to do to shield our economy from sequestration and federal cuts, there is no question that we are headed in the right direction. I want to thank the bipartisan leaders in the General Assembly who worked with my team earlier this year to close a major revenue shortfall, get state employees a much-deserved raise and lay a foundation for future growth. I look forward to working with my colleagues to build on this momentum and lay a foundation for a new Virginia economy."
The governor's office said state revenue collections rose by 8.1 percent, not the forecasted 4.7 percent, which contributed to the record surplus.
The main drivers of the revenue increase were growth in individual income tax receipts from nonwithholding payments, payroll withholding, and lower-than-expected individual income tax refunds.
Republican leaders took credit for their role in helping create the surplus.
"The announcement of a budget surplus is good news for the Commonwealth. It is the result of the Republican-led General Assembly’s responsible, conservative budgeting," Virginia House Speaker William J. Howell (R-Stafford) said. "The General Assembly acted quickly last fall to close a projected budget shortfall, protecting our Triple-A bond rating and putting the Commonwealth back on solid financial footing. We built on that by adopting a series of conservative budget amendments this year that led to this surplus."
Governor McAuliffe said he intended to maintain a conservative approach to building the next state budget.
"I look forward to introducing a budget that maintains our Commonwealth’s fiscal stability while making smart investments in education, workforce development, transportation and health care that will be the foundation for a new Virginia economy," he said.
This is a developing story. Watch CBS 6 News at Noon for a live update from the Capitol.
