Governor McDonnell Announces Number of Cuts and Savings in Upcoming Budget Amendments

Will Eliminate Taxpayer Funding for Public Broadcasting by End of Fiscal Year 2013; Announces $24 Million in Captured Savings from Recent Bond Issuances Taking Advantage of Historically Low Interest Rates; Continue Hiring Freeze in State Government  Governor will Announce Further Savings, Reprioritization and Cuts in Friday Budget Speech

RICHMOND- Governor Bob McDonnell announced today a number of cuts, savings and reprioritizations that will be part of his formal budget amendments on Friday. Cumulatively all of the Governor’s actions will save and then reallocate $191 million in taxpayer dollars.  The full package of all items will be unveiled on Friday.

Among the decisions the governor previewed today are his call for the elimination of state funding for public broadcasting by the conclusion of FY 2013, saving $2 million by the end of FY 2012 and $4 million by the conclusion of FY 2013. The governor further announced that due to the Commonwealth wisely taking advantage of historically low interest rates and other credit enhancements, we will capture $24 million in savings from the recent issuance of Virginia College Building Authority and Virginia Public Building Authority bonds. The governor will also leave open multiple state positions which are currently vacant, and continue strict restrictions on discretionary spending, travel and hiring by state agencies. All of these savings are in line with the recommendations made by the Governor’s Commission on Government Reform and Restructuring.

The cuts and savings announced today:

  • End taxpayer funding of public broadcasting in the Commonwealth, saving: $2 million in FY 2012; $4 million by end of FY 2013
  • Capture savings in the Treasury Board from recent bond issuances taking advantage of historically low interest rates, saving: $24 million
  • Capture savings from decline in check volume, reduce costs of electronic communications, renegotiate banking services contracts, all in Treasury, saving: $297,000
  • Eliminate four vacant positions in Department of Forestry, saving: $420,000
  • Continue agency-wide restrictions in the Department of Health on discretionary spending, travel and hiring, saving: $1.4 million
  • Expand Medicaid managed care programs, saving: $3.5 million
  • Capture vacancy savings across Department of Conservation and Recreation, saving: $250,000
  • Administrative savings at Department of Social Services, saving: $1 million

Speaking about the proposals, Governor McDonnell noted, “In these tough economic times, families and businesses are making difficult decisions every day. They are determining what is a luxury, and what is a necessity, and budgeting accordingly. Governments must do the same. Public broadcasting is a wonderful resource, providing quality programming that is cherished by many. However, in our modern media world there are thousands upon thousands of content providers operating in the free market. They compete with each other, and viewers and listeners have their choice as to what to tune into or turn on. Simply put, it doesn’t make sense to have some stations with the competitive advantage of being funded by taxpayer dollars.  The decision to eliminate state funding of public broadcasting is driven by the fundamental need to reestablish the proper role of government, and budget accordingly.”

He continued, “I am pleased that we have been able to save significant taxpayer dollars by taking advantage of low interest rates in the issuance of some recent, previously approved, bond packages. Taxpayers will save $24 million due to these actions. We will also save taxpayer dollars by eliminating vacant positions in various state agencies, and continuing the strict agency wide restrictions on travel, hiring and discretionary spending. We will reduce spending for dues to national organizations, capture administrative efficiencies throughout state government and expand managed care for Medicaid. We will continue to look for every opportunity to save taxpayer dollars in state government, and we will announce more cost-saving measures on Friday. We must reappropriate these savings to address critical priorities in higher education, job creation and transportation, as well as the many unfunded liabilities the state faces. The fact is, Richmond must live on a budget and set priorities, just like families and businesses do. When we make governments smaller and more efficient, we ensure that taxpayers keep more of what they earn, and we help make our economy more vibrant and productive. ”  

Delegate Jimmie Massie (R-Henrico) noted, “Governor McDonnell knows that we must make state government smaller and more efficient. His savings recommendations and announcements demonstrate that he gets it, and he is committed to ensuring Richmond is fiscally responsible and properly respects the hard earned tax dollars of the people of Virginia.”