Gov. Bob McDonnell’s proposed budget for the next two fiscal years makes a substantial contribution to the Virginia Retirement System, pumps more money into K-12 and higher education and proposes a 3-percent bonus for full-time state employees if they meet certain goals — and does it all without raising taxes.

There are, however, new and increased fees proposed for some Department of Motor Vehicles services.

“In the Commonwealth, we have chosen a path of fiscal responsibility, accountability and restraint,” McDonnell said. “Over the past two years, we have eliminated $6 billion in budget shortfalls and set spending back to nearly 2007 levels. We have not raised taxes. During that same period, we have put historic new funding into transportation and job creation, and we have made the tough choices about where limited taxpayer dollars should be directed to best spur private sector job creation.”

McDonnell hopes to fund the Virginia Retirement System with $2.21 billion during the two-year period, which would be the largest total employer contribution to the system for any two-year period in history.

McDonnell also said the budget provides about $438 million in total new funding for public education for the next two years, a result of the rising costs of Standards of Quality — the baseline funding for schools — and the significant investment in the retirement system for teachers.

The budget also identifies about $1.6 million that can be redirected to new programs to reach children who are most at risk of failing.

However, school divisions now will be asked to report the percentage of their annual budgets spent on instruction to hold schools accountable, McDonnell said.

In higher education, the governor’s budget would provide $100 million in new money each year to fund base operating costs, increase the number of awarded degrees — particularly those in science, technology, engineering, math or health care — provide more financial assistance to students, and more.

In the health care arena, the state will hold Medicaid reimbursement rates flat for hospitals, nursing homes, outpatient rehabilitation facilities and home health providers, withholding the normal increase for inflation.

Finally, the governor’s budget includes a provision for a 3-percent bonus for full-time state employees on Dec. 1, 2012, if the state collectively saves at least twice the cost of the bonus — a resulting savings of at least $83 million to taxpayers.