Reuters: Regulatory News: Virginia surplus nets public employees 3 percent bonus-Gov.

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Virginia surplus nets public employees 3 percent bonus-Gov. Aug 15th 2012, 16:49 Wed Aug 15, 2012 12:49pm EDT Aug 15 (Reuters) - Virginia will give its public employees a 3 percent bonus on Dec. 1 after the state ended fiscal 2012 with a $448.5 billion surplus, Governor Bob McDonnell told state legislators on Wed nesday. It was the third year in a row the state has posted a surplus of more than $400 million, although it was nearly 18 percent lower than the $544.8 million surplus in fiscal 2011. The surplus-linked bonus for workers was in the fiscal 2012 budget but was not in the previous two spending plans. Fiscal 2012 ended on June 30 and last month the state said its revenues had grown 5.4 percent from the previous year and returned to the high level reached in fiscal 2008. The state budget had stipulated that if agencies found savings and did not spend their entire appropriations they could share the wealth of a surplus with employees who had maintained high performance ratings. "Revenues are up due to economic growth, not tax increases," McDonnell told the state's senate finance, house appropriations and house finance committees. Because of its proximity to the nation's capital, Virginia weathered the 2007-09 recession better than many other states. It also found savings in a continued hiring freeze and in reorganization, McDonnell said. The surplus will go into the state's rainy day fund, higher education and a reserve to help mitigate possible federal budget cuts. A budget deal passed by the U.S. Congress last year resulted in a process known as "sequestration," which will bring about automatic spending cuts both on domestic programs that filter through states and on the defense industry that has a large presence in Virginia. About $77.2 million will go toward the bonuses. "After five years without a pay raise, I am pleased that we are able to reward our employees with a performance bonus, while simultaneously preserving core services and building up the Commonwealth's cash reserves," McDonnell said. Link this Share this Digg this Email Reprints

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