RD380 - State Spending: 2021 Update

Executive Summary:

• Virginia’s budget was $67.5 billion in FY21. Three agencies—DMAS, DOE, and VDOT—received half of total appropriations, and two agencies—DOE and DMAS—received half of general fund appropriations because these agencies also administer the largest programs in terms of total appropriations (Medicaid, state education assistance, and highway construction) and general fund appropriations (state education assistance and Medicaid).

• Over the past decade, Virginia’s operating budget increased 5.9% per year, on average. This equated to a total growth rate of 67% between FY12 and FY21. A majority of this growth was in non-general fund appropriations (7.3% per year, on average). The non-general fund budget grew the most between FY18 and FY21, primarily because of Medicaid expansion and additional funds for road construction and repair projects. The general fund budget grew at a slower rate (3.7% per year, on average).

• Adjusted for growth in population and inflation, the total budget grew by an average of 3.3% per year during the 10-year period, with the non-general fund budget increasing 4.7% per year and the general fund budget increasing 1.2% per year, on average.

• The majority of budget growth was concentrated in a few agencies and programs between FY12 and FY21. Ten agencies (out of 147) accounted for 72% of total budget growth with DMAS and VDOT accounting for 48%. Nine budget programs within the core functions of health care, education, and transportation accounted for 66% of total budget growth.

• General fund budget growth was even more concentrated by agency and program. Two agencies—DMAS and DOE—were responsible for nearly half (49%) of general fund budget growth.

• Some agencies have had very large percentage increases in general fund appropriations since FY12, but—with the exception of DBHDS—these agencies are quite small.