Posted: July 23, 2010

By Philip Newswanger

philip.newswanger@insidebiz.com

Gov. Bob McDonnell is a man of tradition.

Like his predecessors, he is quick to pounce on good news, especially if it spotlights more jobs, more company announcements and more investment.

His is a time-honored tradition - take a couple of numbers and work them in his favor. All politicians do it.

The latest example from Richmond is the governor's announcement that the state posted a $220 million revenue surplus for fiscal year 2010, which ended June 30, just six months after McDonnell took over as governor.

Well, this isn't exactly correct.

The state posted a "preliminary revenue surplus" for the fiscal year; the final numbers won't be available until August.

So what does McDonnell know that no one else knows?

Check out the headline on the press release:

"Commonwealth goes from $1.8 billion deficit in January to approximately $220 million surplus."

Does "approximately" mean preliminary? Or does it mean that the $220 million surplus might go up or down in another few weeks when the final numbers are published?

McDonnell was faced with a $1.8 billion budget shortfall for the remainder of the 2010 fiscal year, which ended June 30, when he took office in January.

Rather than boost the individual income tax by 1 percent, as former Gov. Tim Kaine proposed, McDonnell decided to cut spending on health and education instead.

Most of Virginia's lawmakers supported him, so his budget amendments passed intact. Unlike the federal government, the state is required by its constitution to balance the budget.

Kaine is a Democrat who wasn't afraid to advocate for a hike in taxes. Besides, his term was over and his other job at the Democratic National Committee was consuming more of his time.

McDonnell is a Republican, so raising taxes is anathema to him and a potential career killer in case he wants to run for higher office on a platform of no taxes.

In his press release, the governor trumpeted closing the $4.2 billion deficit for the next two years without a tax increase.

The first year of the two-year budget has just begun, and the governor is bragging that the deficit has been reduced without raising taxes.

The last post was June 13, which showed the 11-month revenue figures, July 1, 2009, to May 31, 2010.

"Final numbers will be available in August, and we'll have the breakdown then," said Stacey Johnson, spokeswoman for McDonnell.

In May, the state's revenue was down 3.2 percent, or $394.4 million for 11 months of the fiscal year compared to the previous year, according to the revenue report from the Virginia Secretary of Finance.

Individual income tax revenue, the state's largest source of revenue, dropped to $8.13 billion for the first 11 months of the fiscal year from $8.59 billion for the same period in the previous fiscal year, the report said.

On the economic development front, McDonnell said 110 economic development deals have been closed in Virginia since inauguration day.

And the 110 deals will produce 7,154 jobs and $1 billion in capital investment, the governor said in a press release July 15, touting his administration's efforts at attracting capital and jobs to Virginia.

These are announcements of jobs and investment.

Neither the jobs nor the dollars have been created yet. The jobs may show up in three years and the investment in two years.

By contrast, Kaine announced 14,372 jobs and $1.23 billion after six months on the job in 2006, according to an analysis of announcements by Inside Business.

Mark Warner's administration announced 12,642 jobs and $1.2 billion in investment during the first six months of his term in 2002, the analysis shows. nib