HD14 - State Spending: 2016 Update

Executive Summary:

• Over the past decade, Virginia’s operating budget increased by over $14 billion (41%)—an 11% increase in general funds and a 69% increase in non-general funds. A variety of economic factors and policies contributed to this growth. With population growth of 8% from 2007 to 2015, Virginia had approximately 632,000 more residents. Inflation increased by 16% over the period while the personal income of Virginians increased by 27%.

• Adjusted for growth in population and inflation, the total budget grew by 13% over the 10-year period; non-general funds increased by 35%; and general funds decreased by 11%.

• When general funds declined in several years during the past decade, the total budget continued to increase due to the growth in non-general funds. While the annual average increase in general funds over this time period was 1.3%, the average annual increase in non-general funds was 6.1%. In FY16, non-general funds accounted for 62% of the total budget.

• The 10 largest state agencies (out of 147) accounted for 66% of the total state budget in FY16 and approximately 64% of all budget growth between FY07 and FY16. The agency experiencing the highest growth amount in total appropriations over the past decade was DMAS.

• Growth in general and non-general fund appropriations was concentrated in a few large state agencies over the past 10 years. DMAS and the Treasury Board had the highest growth amount in general funds. DMAS and VDOT had the highest non-general fund growth amounts over this time period.

• The general fund appropriations for 53 agencies either grew more slowly than inflation or declined.

• Budget growth was concentrated in nine large programs within three major areas: health care, education, and transportation. The nine programs (of 215 total programs) accounted for 64% of total budget growth.