News →

Governor, Republicans Find Some Common Ground on Revenue Surplus

Governor Ralph Northam and top Republican lawmakers have come to some broad points of consensus about how to spend surplus state revenue.

Top priorities include one-off spending on rural broadband, higher education, and transportation infrastructure, according to Republican Delegate Chris Jones, who chairs the powerful House Appropriations Committee.

“We’ll be nibbling around the edges--we always do--but we worked very well together last session, and I see that continuing,” Jones said.

Jones and other members of the General Assembly’s money committees met an annual, closed-door Governor’s Advisory Council on Revenue Estimates (GACRE) meeting with state business leaders.

Secretary of Finance Aubrey Layne said the feedback from the business community supported a generally rosy outlook for state finances. State general revenues are up 4.5 percent over last year through the end of October, beating projections of 1.5 percent growth. Statewide unemployment, meanwhile, sits at 2.9 percent.

Layne said he expects the trajectory of growth looks less clear beyond 2020, with a soft statewide housing market and President Trump’s new trade tariffs raising some cause for concern.

“While we’re on a good path, we need to be sure that we are preparing for when things aren’t as good,” he said.

Layne and Jones both said they want to make sure new spending is targeted at once-off projects and doesn't end up on state ledgers down the road.

And the administration and Republicans seem to agree on putting some of the extra revenues into reserve funds to prepare for a future recession.

Northam said his top priorities for the remaining cash were workforce training, infrastructure development, and rural broadband. He’s also targeted spiralling health care costs, and said a Republican Senate proposal to expand access to Affordable Care Act catastrophic health care plans in the insurance marketplace--a plan he vetoed in last year’s session--is “certainly something we can put on the table.”

“The escalating cost of health care is something we can’t continue with,” Northam said. “It will take Virginia and this country to its knees.”

Northam also wants to set aside money for future natural disasters.

The General Assembly convenes its 2019 session on January 9th.