False
McAuliffe
Says he faced "a record budget deficit" in Virginia in 2014.

Terry McAuliffe on Thursday, December 10th, 2015 in a radio interview.

McAuliffe's 'misspoken' claim about facing record deficit

It’s a set part of Gov. Terry McAuliffe’s spiel to talk about how he "inherited a $2.4 billion deficit" when he took office in January 2014 and managed, with the bipartisan help of legislators, to balance the state budget.

In a recent PolitiFact, we checked McAuliffe’s claim that the shortfall was left behind by his predecessor, Republican Bob McDonnell. We noted that McDonnell proposed a balanced budget before leaving office and records show that the brunt of the economic slowdown that caused the shortfall, although not McAuliffe’s fault, occurred during his watch. We rated that claim Mostly False.

The governor added a new element to the claim on Dec. 10 during his monthly radio show on WRVA in Richmond. "I came in with a record deficit I inherited," said McAuliffe, a Democrat.

Without rehashing details of the "inherited" part of his statement, we decided to examine McAuliffe’s claim that the $2.4 billion shortfall he confronted was "a record deficit" for Virginia.

Records show the state faced a far greater crisis at the start of 2010, when McDonnell was succeeding Democrat Tim Kaine as governor and Virginia began suffering the full effects of the Great Recession. Two reports by the General Assembly’s budget committees at that time identified a shortfall of almost $4.5 billion for the two-year budget that would begin July 1, 2010.

Brian Coy, McAuliffe’s director of communications, told us the governor "misspoke" in claiming he faced a deficit record. The reason for the mistake requires a little explanation.

McAuliffe, as we noted in a Nov. 16 fact check, typically follows his claim about inheriting a $2.4 billion deficit with the kicker that he and lawmakers adroitly turned the problem "into a record surplus."

He offered the same kicker on WRVA, noting that the so-called "record deficit" is "now a record surplus."

Coy said McAuliffe inadvertently used the adjective "record" to describe both budget developments instead of just the surplus. "When you talk to the public all day, sometimes you have a slip of the tongue," Coy said.

We know of no other instance where the governor made a similar claim about the shortfall.

The record surplus stems from McAuliffe’s announcement in July 2015 that Virginia ended the first year of its biennial budget $550 million in the black. That slightly outstrips the previous surplus high of $545 million for the budget year ending in mid-2005, according to records going back to 1990. But it should be added that when adjusted for inflation, the 2005 surplus still is the highest.

Some people seeing all these figures might conclude that Virginia’s budget has made an almost $3 billion rebound during the past year -- from a $2.4 billion shortfall in 2014 to a $550 million surplus this year. As we’ve noted before, that’s not the case.

McAuliffe and the legislature overestimated the state’s economic problems in August 2014, when they adjusted the two-year budget to a "pessimistic" forecast of a $2.4 billion shortfall. That assumption turned out to be $550 million too high and produced the record surplus McAuliffe now cites.

Our ruling

McAuliffe said the $2.4 billion budget shortfall he and lawmakers resolved last year was "a record deficit" for Virginia. When we questioned about the assertion, a spokesman said the governor misspoke.

Indeed, the reddest ink in Virginia was seen in 2010, when the state, in the teeth of recession, faced a $4.5 billion shortfall for the coming two-year budget.

We don’t suggest the crisis McAuliffe faced was peanuts or question the explanation that he made a simple "slip of the tongue."

But words matter, and we rate McAuliffe’s statement False.