Buoyed by an improving state economy, Gov. Bob McDonnell urged legislators Wednesday to embrace a bold agenda of transportation improvements, more affordable college education and pension reform.
In his first year the governor focused on plugging a $4.2 billion budget gap and winning new funds for job creation, but now, with a $403 million surplus, achieved mostly through economies, and rising revenue projections, McDonnell proposes to spend $54 million for economic development and to borrow $2.9 billion for roads and bridges.
Relying mostly on money uncovered by audits of VDOT and bonds approved but never issued, McDonnell hopes to ease the frustration of Virginia drivers and create construction jobs, without raising taxes or jeopardizing the state's vaunted AAA bond rating.
Urging the General Assembly to reform the state's pension fund, which faces $17.6 billion in unfunded liabilities, he wants employees, who currently pay nothing into the plan, to contribute 5 percent of their salaries, offset by a 3 percent raise. Coupled with a 2 percent state contribution, McDonnell's proposal would close the gap by $4.2 billion over a decade.
The governor also wants to change the way colleges are funded, especially to head off steep tuition hikes, with a goal of awarding 100,000 more degrees over 15 years.
Despite his spending plans, McDonnell insisted he believes in a government that concentrates on "core" services, which exclude selling liquor and funding public broadcasting. Although his original plan to dismantle the state ABC's monopoly fizzled, he lobbied for a scaled-down proposal possibly more amenable to legislators.
After only modest legislative victories last year, McDonnell has significantly raised his sights. He cleverly challenges Democrats, who have long lamented the political gridlock that compounds transportation gridlock, to endorse his ambitious, debt-based solution.