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Understanding how Virginia spends money: A primer

Associated Press Modified: November 25, 2012 at 10:46 am •  Published: November 25, 2012

Republicans with a deep anti-tax streak rule the House and Senate. The last general tax increase came in 2004, though lawmakers since then more willing to increase fines, fees and other costs as long as they're not called "taxes."

The total size of the current budget is $80 billion for the two years that began five months ago and ends June 30, 2014. It's broken into two different funds — the general fund and the non-general fund.

The general fund derives from broadly based taxes with individual and corporate income taxes chief among others. Because much of it is discretionary and covers core state services traditionally closest to ordinary people, it usually generates the most passionate disagreements. Among its uses are Medicaid and other health care programs, public safety from the state trooper on the road to the Virginia National Guard, and the state share of funding for local public education from kindergarten through senior year.

In the budgeting process, the largest single source of general tax revenue is called "withholding" because it's withheld from the paychecks of hourly and salaried workers. It accounts for roughly two-thirds of the general fund.

The non-general fund is largely a pass-through for direct payments to dedicated purposes — federal aid to specific programs, for instance, or tuition payments to state-supported colleges that mostly gets returned to the institutions. But it also encompasses the 17½ cents-per-gallon gasoline tax reserved for transportation funding. The fuel tax, enacted in 1986, has not changed since.

Democrats see red when Republicans try to divert general funds to cover dire and worsening shortages in transportation funding. Republicans, including McDonnell, say transportation is as basic a service as state government can provide.

One of several bills to increase transportation funding got a conspicuous launch earlier this month. Sen. John Watkins' bill would collect a 5 cent sales tax on gasoline indexed to its cost; retain the per-gallon fuel tax; lower marginal income tax rates; and apply the sales tax to several transportation-related goods and services long exempt from the tax as a way to reimburse the general fund for lost income tax revenue.

It would also prohibit any tolls not approved by the legislature on existing roads.

Told you it was complicated.



Legislative budget meetings:

Virginia's current budget:

FAQs on Virginia's budget:


Bob Lewis has covered Virginia government and politics for The Associated Press since 2000.