McDonnell Touts Spending Cuts After Virginia Registers Budget Surplus

Virginia Gov. Bob McDonnell urged fellow governors Tuesday to take a critical eye toward federal stimulus money, acknowledging it helped his state plug "a few holes" but saying they shouldn't get used to the aid.

The governor, who announced a $403 million budget surplus last week, touted his state's approach as a winning formula -- accept the stimulus, but cut billions out of state programs on the side. Otherwise, McDonnell said, the states will become dependent and sink deeper into the red.

"In the short run, most governors would say that (stimulus money) ... certainly plugged a few holes, but you know, long term, that's not going to be the solution because what you do is you build those requirements into your base operating budget, which creates more demands in the future," he told Fox News. "Long term, the only way you're going to have fiscal responsibility in the states is you've got to have a long-term permanent reduction in spending levels."

Virginia went from having a $1.8 billion shortfall to a $403 million surplus for fiscal 2010, which ended June 30. The state government has already cut $4 billion over the next two years, slicing away at normally untouchable funding for education, health programs and other areas.

Amid the fiscal fanfare, the Democratic National Committee claimed Virginia would not be in such good shape if not for the stimulus.

"It's important to note that the $403 million would not have been possible without $2.5 billion in Recovery Act dollars the commonwealth took in," the DNC said in a statement.

State lawmakers also said budgetary gimmicks were used, such as delaying payments to the state's retirement system and calling in sales tax revenue a month early, according to The Washington Post.

But McDonnell, saying Virginia's spending grew 73 percent over the last decade, claimed the spending cuts were the most important factor.

"We've got to cut spending. Looking at what's going on in Washington. We can't do that," he said. "We must cut spending." McDonnell, who governs alongside a Senate led by Democrats and Republican-led House, praised "bipartisan cooperation" for the balancing act.

House Republican Leader John Boehner of Ohio gave McDonnell and New Jersey Gov. Chris Christie special praise during an economic speech Tuesday in Cleveland, saying McDonnell refused to close the hole simply by imposing tax increases.