RICHMOND, Va. (AP) – Virginia Gov. Terry McAuliffe is proposing a billion dollar increase in education spending, small tax cuts, and a 2 percent raise for state employees.
The Democratic governor is also renewing his long-shot push to convince the GOP-controlled General Assembly to approve an expansion of Medicaid.
McAuliffe unveiled his $109 billion two-year budget proposal Thursday at the Capitol. He says he took a conservative approach to spending that will help improve Virginia’s long-term economic outlook.
Higher-than-predicted tax revenues have given McAuliffe more leeway in crafting his budget, which will be a starting point for negotiations with Republican legislative leaders.
GOP lawmakers have already acted coolly toward some of McAuliffe’s announced proposals, and have repeatedly said they will not vote to expand Medicaid.
The following is a transcript of his statement:
Chairman Stosch, Chairman Colgan, Chairman Jones, Chairman Ware, members of the General Assembly, ladies and gentlemen: Good morning.
And to my wife, First Lady Dorothy McAuliffe, Attorney General Mark Herring and members of my cabinet, thank you for being here today.
We come together at a pivotal moment for our Commonwealth.
Last year at this time, we confronted a $2.4 billion dollar state budget shortfall while staring down the barrel of federal sequestration cuts that threatened to disrupt our strategic planning over the long-term and severely harm our economy
It wasn’t always easy, and at times we took our knocks – but we should be proud of how we’ve stayed in the ring and kept swinging, and our Commonwealth is better off for it. Now, the economic landscape has changed for the better, Congress is getting its act together, and we have a genuine opportunity to take the next step forward.
I know that we all breathed a sigh of relief when Congress put off sequestration for two years and finally passed a five-year transportation plan. Those actions represent a reprieve from the economic disaster that sequestration cuts and stalled transportation projects would create – but they also put our Commonwealth at a unique crossroads.
Two years from now, the budget I am announcing today will be winding down. Our nation’s fiscal and political environment may have devolved once again into chaos. We cannot control those outside forces, but we can accept responsibility for our own destiny.
The question before us today is: How will we spend the coming two years?
Will we seize this opportunity to diversify our economy and lay a solid foundation for decades of continued growth?
Will we invest in priorities that we all agree will make our economy, our communities and our families stronger?
Or will we get bogged down in the same wasteful partisan bickering that gave rise to sequestration in the first place?
Two years from today, we will be here again, and it is my hope that we can say we spent every day working together to build a new Virginia economy – starting with this budget that we will pass together in 2016.
You already know what we can achieve when we’re working together to beat the odds, but let me remind you of our accomplishments so far.
Accomplishments
We’ve made 540 economic development announcements bringing $9.08 billion dollars in capital investment into the Commonwealth, more than any previous governor in his first 23 months in office. And, based on the work we’ve been doing at home and overseas to bring new projects to this Commonwealth, I have a feeling that 2016 will be our best year ever.
Our unemployment rate dropped to 4.2 percent in October, the lowest since August 2008 and the lowest in the Southeast.
And I am proud to announce today that initial unemployment claims are now at their lowest level in 41 years.
The total number of jobs in Virginia is now 3,827,400, an increase of 67,800 since the start of this administration.
I am pleased to tell you that there are more jobs in Virginia now than at any other time in the Commonwealth’s history.
It’s clear that I am among the most well-traveled governors in the nation. In our pursuit of economic opportunities, we have traveled to 13 countries, including two trips to China and visits to the UK, Japan and South Korea.
During our most recent mission to India and the Middle East, we were able to lift the ban on poultry imports into Kuwait and Oman, a victory for Virginia agriculture in the global marketplace.
We helped seal a new deal for the sale of Virginia apples in the highly competitive Indian market – building on last year’s historic agreement that opened India to Virginia-grown apples for the first time in history. And we just signed an agreement with Dubai Economic Development in the UAE to collaborate on business opportunities.
We are moving toward my goal to be the Number One exporter of agricultural and forestry products on the East Coast.
We recently bumped North Carolina out of second place, and we are now aiming to show Georgia who’s the boss.
As we worked to create great jobs and economic opportunities for the next generation of Virginians, we put a special effort into honoring our veterans every step of the way.
Virginia is the first and only state thus far to functionally end veteran homelessness.
Our Virginia Values Veterans team also helped to connect 13,000 veterans with great jobs, far exceeding our original goal, and they are marching forward on a new goal to assist 20,000 veterans.
And we have significantly accelerated projects that will bring two new veteran care centers to the Commonwealth, one in Hampton Roads and one in Northern Virginia.
Our state agencies have aggressively sought out and won federal grants that are benefitting communities across the Commonwealth.
They include:
$9.3 million dollars to help our citizens sign up for health insurance through the Federal Marketplace
$39.9 million in transportation TIGER grants, more than any other state.
$17.5 million dollars to expand and improve our Virginia Pre-school Initiative, and
$8.8 million dollars to provide nutritious meals to children across the Commonwealth thanks to the dedicated work of our First Lady. Let’s give her a round of applause.
We can and should feel good about these results.
But in this new era of economic globalization, we cannot sit anchored in our safe harbor and wait for new jobs and growth to appear on the horizon.
When I talk about building a new Virginia economy, I am talking about a 21st century approach that requires us to broaden our competitive scope and sharpen our strategic vision.
We have two years of strong results, showing us what works and pointing us in the right direction.
Now we must shift into high gear with smart reforms and investments that will spark accelerated growth and guarantee the long-term financial health of the Commonwealth.
We have been making the case for revolutionizing our economic strategy in every community in Virginia, personally visiting our businesses, schools and community colleges.
The budget we present today is an extension of the work that our administration is doing every day to build a new Virginia economy.
We’re building a new Virginia economy by investing in our future through significant funding for public education and our institutions of higher education.
We’re building a new Virginia economy by creating the jobs of the 21st century through a transformation of our workforce system.
We’re building a new Virginia economy through forward-looking policies that put a premium on high-growth industries including cybersecurity, bioscience and technology.
And we’re building a new Virginia economy by fostering stronger, safer and healthier communities.
We’re supporting the programs and policies that are working, and transforming the ones that are failing us and our taxpayers.
Over the past two years, we’ve taken on bipartisan goals that were clearly in the Commonwealth’s best interest.
Looking at this dais, I am reminded of the hours my staff and I have spent with many of you over the past two sessions, poring over the finer details of budget language. Making tough decisions in the face of big shortfalls. Working together on compromises that funded mutual priorities and set divisive issues aside. Proving to observers across the nation and the world that Virginia is still a place where leaders can work together and get the job done.
I want you to remember how good that success feels as I walk through our spending plan.
I also hope you feel some ownership in this budget. You should, because I have taken great care to be inclusive and make you part of our budget process this year.
In September, I wrote to each of you and invited you to tell me about your budget priorities.
More than half of the General Assembly responded, and the conversations we had made the budget that I am presenting today an even stronger product.
I was proud to hear from several of you that this was the first time in memory that a governor invited all of the General Assembly to participate in the budget formulation process before it was introduced.
And I wish I could have included funds for every one of your requests, but as you know, I’m CUTTING taxes, not raising them.
To govern is to choose, so let me walk you through the choices that we have made.
Revenues and Structural Balance
I’ll start with the revenue framework and the actions we’ve taken to ensure that this is a solid, structurally balanced spending plan.
We have chosen a conservative revenue forecast in the face of continued economic uncertainty. We placed a collar on how much nonwithholding income tax receipts could contribute to total general fund revenues. This acts as a hedge against the inherent volatility of these payments. And it worked. Actual nonwithholding receipts exceeded the cap in fiscal year 2015, contributing to the $549.6 million dollar revenue surplus, the largest in the Commonwealth’s history.
As you know, the Virginia Department of Taxation prepares economic forecasts with input from the Joint Advisory Board of Economists and the Governor’s Advisory Council on Revenue Estimates.
The forecast calls for real gross domestic product in the U.S. to continue to grow. In Virginia, both employment and personal income are forecast to grow through fiscal year 2018. Job growth is on track to reach 1.5 percent for fiscal year 2016 to meet the forecast. This would be the strongest gain since 2006.
As a result of this process, the Budget Act, Chapter 665, calls for collections of $17.7 billion dollars in total general fund revenue in fiscal year 2016, a 0.1 percent decline. GACRE members were presented a forecast that added $913.1 million dollars to fiscal year 2016, bringing the growth rate to 5.1 percent. For the next biennium, the forecast indicated growth rates of 3.0 percent for fiscal year 2017 and 3.7 percent for fiscal year 2018.
Following the advice of GACRE members, the general fund revenue forecast was reduced by the following amounts:
$35 million dollars from income withholding in fiscal years 16 and 17.
$60 million dollars in FY 16 and $30 million in each of the following two years from corporate income collections, and
$181.9 million dollars from nonwithholding to reflect the collar in FY16, followed by subsequent reductions of $188.2 million dollars in FY17 and $194 million dollars in FY18.
The collar is just one of the methods used to ensure this budget is conservative and structurally sound. We also:
Unwind the accelerated sales tax collections for more than 90 percent of dealers
Fully fund the actuarial rate for state employee and teacher retirement funds by 2018, two years ahead of schedule.
Pay for maintenance reserve projects with cash not debt.
And deposit $605.6 million dollars into the revenue stabilization fund, bringing the rainy day fund up to $845.3 million dollars in June 2017.
This budget also includes several tax policy changes that will affect anticipated revenue collections.
I am recommending that the personal/dependent exemption on the individual income tax return be increased from $930 to $1,000 and that the exemption for the aged and blind be increased from $800 to $900. This will be the first time in 10 years that the amount for these exemptions has been changed.
I also am recommending that the corporate income tax rate be reduced from 6 percent to 5.75 percent.
And I am recommending a series of enhancements to corporate and personal income tax credits for research, investors, donations to neighborhood assistance programs, food banks and expenses for the support of young people with disabilities.
With these adjustments, the revenue forecast in the introduced budget for fiscal year 2016 is a $592.7 million dollar increase over the estimates contained in the current appropriation act.
This amounts to a 2.8 percent increase in revenues and transfers from actual collections in fiscal year 2015.
I also am recommending that the corporate income tax rate be reduced from 6 percent to 5.75 percent.
The general fund revenue forecast included in my introduced budget for the 2016-2018 biennial budget totals $28.4 billion dollars.
This is predicated on growth rates of 3 percent for fiscal year 2017 and 3.7 percent for fiscal year 2018.
You can see that we have taken a fiscally responsible, pragmatic approach to this budget.
But you will also find that this budget puts forth a series of ambitious goals.
Ladies and gentlemen, you are looking today at the Commonwealth’s first $100 billion dollar budget.
This budget is a measure of our growing economic strength, but it is also a structurally sound commitment to prudent fiscal policy.
I am confident that the investments that I will outline today are appropriate at this point in the economic cycle when we can see tangible improvements to our bottom line.
These investments represent promising strategies to strengthen our future economic and fiscal position, and to make sure we are as prepared for prosperity as we have been for hardships.
This budget is truly a historic document, so let me fill you in on the details.
I am confident that the investments that I will outline today are appropriate at this point in the economic cycle when we can see tangible improvements to our bottom line.
INVESTING IN THE FUTURE
I told you in August that my top priority in this budget is modernizing our public education system to meet the needs of a new Virginia economy.
And I would never let you down.
Today, I present to you a budget that provides more than $1 billion dollars in new investment for public schools, colleges and universities.
We are directing new resources into the classroom to make sure our children are proficient in the skills necessary to compete in a global workforce.
When I was elected, I made it clear that our administration would work with schools to help them succeed, and I am proud of the gains that we have seen over the past two years.
200 Virginia public schools that were accredited with warning last year are now fully accredited.
There are now 1,414 fully accredited schools in Virginia, a 10-point increase in the percentage of schools with our highest rating. These are very impressive achievements, particularly considering the fact that state spending on direct education is just now getting back to funding levels from before the recession.
We’ve conducted eight education roundtables and visited dozens of schools, and I’ve seen for myself that we need more teachers in our schools so that every child gets the attention he or she deserves.
Statewide, we lost nearly 5,000 K-12 positions since 2008.
This is true even though enrollment has risen, student needs have gotten more challenging and our standards have become more rigorous.
In other words, our schools are being asked to do more in 2015 even while our investment in student success has essentially not increased since 2009. But it’s important to remember – if we are going to lead in the global economy for generations to come, we can’t be thinking about building 2015 educational programs. We need to be building programs for student achievement in 2025, 2050 and beyond.
We begin by putting more teachers into classrooms and giving them the resources they need to succeed. This budget accomplishes that important mission by investing $139 million dollars over two years to add nearly 2,500 instructional positions across the Commonwealth.
Every dollar will directly benefit our classrooms, with an emphasis on key instructional areas critical to the economy and the job market of the future. The funds will be distributed based on a formula of one position for each elementaryschool in Fiscal Years 2017 and 2018 and two positions for each middle and high school in 2018.
Our K12 budget also includes $429.8 million dollars for rebenchmarking, $50 million dollars for at-risk funding, and $5 million dollars to more than double our investments in equipment for high-demand, high-wage credentials at our high school career and technical schools.
Ladies and gentlemen, we are taking Virginia’s investment in public education to the highest level in the Commonwealth’s history.
We’re not only setting a record in total state spending on education; we’re also pushing up our per pupil contribution to $5,446 in 2018.
Again, this is the highest level of student support in our history.
Just as important, this budget is designed to maximize the value of every dollar we are investing.
And it gives local school divisions flexibility to use the funding for teachers and other instructional staff to address the specific needs in each community.
I am keenly aware that the shared responsibility for funding schools has gotten out of balance, and this has put pressure on our cities and counties. That’s been a particular problem in communities with the greatest economic challenges.
This budget sends a message that the state is ready to shoulder its fair share of the costs.
I want to take a minute to talk about early childhood education.
We’ve had significant achievements in pre-K, including a $17.5 million dollar federal grant that is helping to expand our Virginia Preschool Initiative so that we can now serve 13,200 low-income four-year-olds in high-quality classrooms.
As committee members know, we debate every year exactly how much to invest in pre-K. No one disputes the need to give every child a solid educational foundation. No one is satisfied with the status quo.
But we also know that many of our schools that want to increase their pre-K programs face obstacles, including the lack of appropriate classroom space.
This budget sends a message that the state is ready to shoulder its fair share of the costs.
In keeping with our philosophy that we will invest in pragmatic, workable solutions to our challenges, I am proposing that we use this budget to strengthen our ties with private and community partners who share our goals.
This budget includes $6.9 million dollars in new funding to the Virginia Early Childhood Foundation, which has strong support in our business community. These dollars provide grants to fund public-private pilots for high-risk children in our most stressed communities.
The grants will also assist our early childhood educators in strengthening their skills through courses available at community colleges.
If we are going to build a new Virginia economy, we must make education our top priority this year and every year.
But let me be clear.
We cannot effectively educate the workforce of the future if one in six Virginia children is going to school hungry.
Thanks to our First Lady’s outreach and advocacy, 100,000 Virginia students across 26 divisions are now benefitting from the community eligibility provision, which allows schools to provide meals at no cost to the students or their families. Across the nation, school participation in this new federal program expanded by 20 percent. In Virginia that rate was 139 percent!
Last year, you invested funds to support expanding school breakfast programs across Virginia.
Dorothy and I are excited that last year’s funding is helping 244 schools expand their breakfast programs, but we had an additional 310 schools seek funding that we weren’t able to support.
So I’m excited to announce that our new budget will double this funding to $2 million dollars to meet the demand and support alternative breakfast models that reduce child hunger and increase classroom performance.
Just as we must ensure our children have access to high-quality pre-K and the nutritious meals they need to learn, we must make sure that higher education is within their reach.
We make good on that commitment with $48 million dollars in new resources for financial aid to our public colleges and universities over the next two years, and $50 million dollars in incentives to increase the number of students obtaining postsecondary degrees, as well as an increase in the Tuition Assistance Grant from $3,100 to $3,400 for Virginia students attending private, nonprofit colleges.
We’re also pressing forward with the transformation of our workforce development system. This budget includes $25 million dollars for Virginia’s community colleges over two years to help us meet our goal of awarding 50,000 STEM-H credentials annually by the end of this administration and more than 460,000 credentials by 2030.
Once we reach that goal, the Commonwealth will be the nation’s #1 state for percentage of population holding a workforce credential, or Credentials to Compete.
We also include funding for a cyber range that will allow our next generation of cyber professionals to hone their skills for detecting and preventing attacks.
And we will provide incentives to our community colleges and four-year institutions to obtain recognition as cybersecurity Centers for Academic Excellence.
I hope you saw the news last week that Virginia is one of four states selected for a new Air Force Cyber Operations Squadron, which the Virginia Air National Guard will establish at Langley Air Force Base. All 50 states fought very hard for this project, but the Commonwealth made the grade. We must continue to strengthen our cyber education system.
Right now, in the technology and cybersecurity sectors alone, Virginia has 30,000 unfilled jobs that equal more than $3 billion dollars in annual wages.
Our Virginia companies are losing $21 million dollars a day because of unfilled jobs.
So the skills gap is costing us big time.
We must build a sustainable cyber pipeline if we want to meet my goal of making Virginia America’s cybersecurity state.
Now, Virginia’s talent pipeline ties together our K12, higher education and workforce budgets, and those investments are underscored by our $2.43 billion dollar bond package.
This game-changing infusion of capital investment includes $100 million dollars over two years plus another $20 million dollars each year in cash to renovate research labs and attract top talent in bioscience and other emerging sectors.
We’ve also targeted $850 million dollars to projects at four-year institutions and an additional $214 million dollars for community colleges to address the growing demand for STEM-H credentials and degrees.
CREATING 21ST CENTURY JOBS
This brings us to the second theme you will see in this budget, which is closely intertwined with our educational investments.
As you know, we have been in relentless pursuit of new businesses and jobs for the Commonwealth.
We have no intention of slowing down. Our budget includes necessary investments so that we can step up our pace as we create the 21st century jobs that will enable our Commonwealth to prosper for generations.
The two-year spending plan for economic development totals $256 million dollars, including $9 million dollars each year for the Virginia Economic Development Partnership.
Embedded in my economic development plans, you will see an aggressive emphasis on trade.
I am proud of the success we are having bringing new companies to Virginia to locate and create jobs.
But I am putting just as much energy into helping our existing businesses grow by connecting them to new opportunities.
International trade is a powerful engine for generating business growth and creating jobs.
Last month, the Virginia Chamber of Commerce released its “Virginia International Trade Profile,” the first-of-its-kind analysis of Virginia’s exports and their impact on our economy.
Reading that report, the takeaway is clear: If we are going to grow and diversify our economy, international trade must be front and center.
From 2009 to 2014, nearly 30 percent of Virginia’s economic growth was driven by exports.
That is because the bulk of economic growth is occurring outside the United States.
95 percent of global consumers live outside of the U.S., and 81 percent of global economic growth will occur outside the U.S. from 2015-2020. That is why I devote so much time to international marketing and trade missions. I’m going where the customers are.
These numbers make it clear: We must enhance our global reputation and position Virginia as the international hub for trade and investment.
This budget includes $3.65 million dollars annually for international trade and export programs, redoubling our focus on finding new markets for Virginia’s great products.
With this investment, we’re going to grow Virginia exports of manufactured goods and services by $1.6 billion dollars in the next 5 years.
We’ll also create 14,000 trade-supported jobs in 5 years from companies in Virginia’s export assistance programs.
And we’ll double the number of companies selling in global markets through Virginia’s trade programs to serve 390 companies per year.
Of course, if we’re going to ramp up our trade game, we need a world-class port. Our budget includes new operations and maintenance funds needed with higher traffic volumes, and we also have proposed $350 million dollars in bonds for terminal expansions.
Our Port is a key economic asset that creates jobs and supports communities throughout the Commonwealth. But it’s now just beginning to show its true potential.
Over the past five years, the Port had lost more than $120 million dollars. I’m proud that we’ve turned it around by replacing the governing board and supporting John Reinhart as he took over as the Port’s new director.
Our new team isn’t focused exclusively on increasing the number of containers coming through the Port, since we were losing money on every one of those containers.
Today, we’re focused on the profit we make per container, and that perspective has made all the difference.
This summer, the Port posted an operating profit of $14.2 million dollars, a $30.8 million dollar swing from the past fiscal year. It was the first operating profit since 2008.
This dramatic turnaround positions the Port for aggressive growth as the expansion of the Panama Canal sends more and more Post-Panamax ships to our shore.
With our natural 50-foot-deep channels, we are the only port on the East Coast that can handle these super-sized ships.
But we cannot be complacent. Right now, New York and New Jersey are raising the Bayonne Bridge, scheduled for completion in 2017, in an effort to catch up to Virginia and capture a larger share of the cargo moving in and out of the United States. We must take aggressive action to solidify our strategic position and maximize the potential of this key economic asset.
Of course, the Port is one of two connections that the Commonwealth has to the global economy, and we must be good stewards of both.
To that end, we are including $50 million dollars in non-general funds over two years to help Dulles International Airport attract additional carriers and retain existing ones.
Dulles serves 23 million travelers a year. It welcomes 445 weekly flights on 28 carriers from 50 international destinations.
Of particular importance, the United hub at Dulles Airport supports 45,000 direct and indirect jobs in this region. Maintaining that carrier alone must be a top priority for our Commonwealth.
This airport has experienced financial turbulence for years, but it is a key economic asset that demands our attention if we wish to remain competitive in today’s global economy.
In other economic development initiatives, we’re doubling the amount of our AFID Fund and removing the existing grant cap.
We’re investing $2.4 million dollars over the next two years to strengthen our competitive position in the battle with New York for a $1 billion dollar electron ion collider project through Jefferson Labs.
And we’re targeting $38.9 million dollars to partner with Go Virginia as it fosters regional collaboration among businesses, government and education leaders to help us achieve our shared economic goals.
Of course, our most valuable resources are the highly skilled workers who we need to build a new Virginia economy.
Our veterans have been at the forefront of our economic and workforce initiatives from Day One, and they remain an essential part of our team in this budget.
Our plan contains $7.8 million dollars over the biennium to connect our veterans to educational resources, workforce training and support services they need to make a speedy and seamless transition into great civilian careers.
This includes funding for a pilot program that will empower former military combat medics and corpsmen to work in health care careers while they earn the appropriate civilian credentials.
The budget also adds four new staffers to our high-energy V3 program, which is making a difference in the lives of our veterans and in our economy.
And we have invested $2.2 million dollars over the biennium to create veteran advisory positions at community colleges.
Of course, when we talk about the need for a 21st century workforce, we include the great public servants who run our state agencies, the teachers in our classrooms, and the police officers and deputies who keep us safe.
Our budget recognizes the essential contribution of these men and women with well-deserved raises.
For state workers, our budget contains $60.6 million dollars for a 2 percent pay raise. This is part of a $159.5 million dollar package that will provide raises for state employees, college faculty and staff, public school personnel, deputies and other state-supported local workers.
In addition to this 2% pay raise, we have included funds to address the salary compression plan for sheriffs’ departments and regional jails in order to make sure that we are rewarding the long and dedicated service of our deputies and other officers. I see that we have a group of sheriffs here to my right – and I know that they and their officers are most deserving of this salary adjustment.
Fostering Healthy Communities
One of my core beliefs throughout this administration is that healthy communities are an essential part of our work to build a new Virginia economy.
Here in Virginia, we have a unique opportunity to craft a plan with no short- or long-term obligations to the Commonwealth.
My commitment to this fundamental truth has not waivered despite the obstacles we have faced over the past two years.
The debate over Medicaid expansion has dragged on in the Commonwealth for years, even as we have seen the benefits available in the 30 states and the District of Columbia that have taken this commonsense step.
It’s been a contentious debate, but you cannot deny the results seen in expansion states that are experiencing budgetary savings.
In Kentucky, expansion has had a $300 million dollar positive impact on the state’s general fund over two years.
In Arkansas, the state budget is expected to experience a positive impact of $438 million dollars from 2017 to 2021, and hospital uncompensated care costs are projected to drop by $1.1 billion dollars during that period.
Now, I have come at this issue from every angle.
The Virginia Chamber of Commerce and I have made the economic case that we are forfeiting $2.4 billion dollars in federal funds every year.
I have visited our rural hospitals and talked about the urgent need to make sure these institutions remain open. In many cases they are the only option available for medical care within miles, and they are the largest employer in their community.
I recently met with the CEOs of Wellmont Health System and Mountain States Health Alliance, who are being forced to merge their hospital systems in order to survive. Let me underscore the severity of the situation: Those seven hospitals in Southwest Virginia are being subsidized by Tennessee to the tune of $11 million dollars per year.
Here in Virginia, we have a unique opportunity to craft a plan with no short- or long-term obligations to the Commonwealth.
This opportunity is within our reach thanks to our hospitals.
They have put a new plan on the table, one in which they will provide the matching contributions needed to draw down federal funds. This is a good deal for them and it’s a good deal for the Commonwealth.
We can save $157 million dollars in state funds over the next two years and use those savings to provide Virginia businesses and families with $105.7 million dollars in personal and corporate income tax relief and boost the Commonwealth’s economy.
I remain convinced that this action is necessary and inevitable. However, if you choose to leave this money on the table, there are many other positive initiatives that we can accomplish together for the good of the Commonwealth.
But I ask this: Do not make a snap decision against expansion.
Many of you have spoken with me privately, and you’ve acknowledged the need for action.
Please review the details of our plan with an open mind and work with me to reach a resolution that will benefit our constituents, our hospitals and our communities.
My door is open, and it’s time to talk.
Fostering stronger, safer communities
One message that we have made clear to every state agency is that we will invest in success, and we will transform outdated systems to ensure that we are providing only the best services to our citizens.
No agency has taken that message more to heart than our Department of Juvenile Justice.
Our juvenile justice system is supposed to help young men and women get on the right path, but research shows that the longer young people spend in our juvenile correctional centers, the more likely they are to commit another crime. Our system is built for failure.
We must have a 21st century solution that gives our young people the support they need to turn their lives around.
We’ve already reduced the population in our juvenile correctional centers from 600 to 350.
The next step is to reinvest savings from reduced incarcerations to build smaller, secure, state-of-the-art centers and community-based treatment alternatives.
While our young men and women are Virginia’s greatest asset, we have many natural resources that are essential to our economic wellbeing and to our heritage as a Commonwealth.
That’s why our bond package includes a historic investment in our state parks, including the full development of Biscuit Run in Albemarle County and Widewater State Park in Stafford.
And finally, there is another $59 million dollars in bonds targeted to local water quality projects that will help us meet our goals for cleaning up the Chesapeake Bay.
Conclusion
The two-year spending plan I present to you today provides specific and meaningful building blocks for the new Virginia economy by investing in our future through education and research; creating 21st century jobs; fostering healthy, safe communities; and adopting sound financial policies.
This budget is prudent, structurally balanced and focused entirely on laying the foundation we need for a new Virginia economy.
It invests in the tools and resources needed to build on the momentum of the past two years.
Two years from now, we will all look back with regret at a wasted opportunity, OR we will all look back and feel good about what we’ve accomplished together.
This is an extraordinary moment. It is our chance to show the world what a Commonwealth really means.
I thank you for taking the time to work with me to build a new Virginia economy and for listening to my plans for the future.
I hope you and your families have a spectacular holiday season, and I look forward to seeing you back on Capitol Square very soon.
The Associated Press contributed to this report.
Filed under: News, Virginia Region 
