RICHMOND, Va. (WRIC) — Virginia ended fiscal year 2021 with a budget surplus of $2.6 billion. That’s the largest in state history, according to Gov. Ralph Northam.
Northam made the announcement during a Wednesday morning presentation to House and Senate Finance and Appropriations Committees.
The surplus, which far exceeds initial forecasts, puts the state in a good position heading into the 2022 regular session when the General Assembly will negotiate a new two-year budget.
In a release, Northam’s office said that the Commonwealth is on track to put nearly 15% of the general fund budget in reserves by the end of the Governor’s administration, nearly double the 8 percent goal he set at the start of his term.
“Our economy is roaring. We see that in these revenue numbers … at the same time we don’t know what the future holds,” Northam told lawmakers. “So as we head into the fall, we will continue to be cautious and prudent in our budgeting. We want to be ready for any more surprises COVID may throw our way.”
State officials have attributed the surplus to better than expected revenue growth, cautious spending strategies during the pandemic and federal stimulus dollars that helped stabilize the economy.
Earlier this month, the General Assembly approved a plan to spend — or save — roughly $4.3 billion in federal relief allocated to Virginia through the American Rescue Plan Act.
Northam said coronavirus vaccinations also allowed the economy to reopen and accelerate faster than expected.
“We have access to safe and effective vaccines and that is what is driving this remarkable economic turnaround,” Northam said. “We accomplished all this during a pandemic that many expected to break our budget—and did exactly that to many other states.”