News Column

Virginia budget on the fast track

June 12, 2014

By Travis Fain, Daily Press (Newport News, Va.)

June 12--RICHMOND -- The wheels are well in motion for the full Virginia General Assembly to pass a budget Thursday without dealing with Medicaid expansion and without many of the spending increases legislators had once hoped to include.

Raises for teachers and state employees have been removed from the budget documents legislative staffers were working to finalize Wednesday evening. So, too, were reimbursement increases for hospitals, which were meant to keep up with inflation.

Those increases, initially placed in the budget by House Republicans, were part of the House's answer to Medicaid expansion. They wouldn't approve expansion, which would mean billions in federal dollars for hospitals, but they were going to approve a smaller increase to help facilities.

With poor revenue projections stacking up, that help is gone for hospitals, though some of the increases for nursing homes has survived.

Gone, too, is the big increase the House had proposed for free health clinics. Most of the new funding earmarked for the state's mental health system remains intact, though, House budget writers said Wednesday.

Funding to fill longstanding judge vacancies in the courts system has also survived. House budget writers said there will be 35 to 45 new judges, between filled vacancies and new slots.

A $300 million project that will build a new office building for the General Assembly, as well as a parking deck and some upgrades for a historic building next door, also survived. That funding was added to this year's budget earlier this year, and legislators are tinkering with the two year budget that starts with fiscal 2015, which begins July 1.

Building projects on college and university campuses will also survive, it appears.

The university system won't get the extra operating money it was once expecting, but because they also won't have to account for raises initially included in the coming budget cycle, they probably won't need to raise tuition beyond already approved increases, Robert Vaughn, staff director for the House Appropriations Committee, predicted Wednesday.

Basically, state departments, colleges, universities and local governments will get the same state funding next year under this budget plan that they got this year. The main exception: public schools will see an increase, largely meant to cover enrollment growth.

The rest of the new spending in the state's two year budget is essentially gone. That includes the $1 million peninsula leaders had hoped to get to make land purchases around Langley Air Force Base -- part of an effort to protect the base from potential federal closure reviews.

The changes come on the heels of another poor revenue report for the state. May figures were down across the board. They signal a definite shortfall for this year, and a likely one for the coming budget years.

There are still major tax payments due in June -- sales taxes are due on the 20th, and large corporations will make payments mid-month. But it won't be enough to drag state revenues back to where they were predicted to be, McAuliffe Finance Secretary Ric Brown said.

The picture for fiscal years 2015 and 2016 is harder to predict, and will be revisited in the coming months. The General Assembly has another opportunity to rework the budget, and perhaps boost funding, next year. For now they're taking a cautious line, extrapolating lower revenues for the next two years based on this year's numbers.

Taken together, that shortfall could be as much as $1.6 billion out of a budget 2-year budget that initially totaled some $96 billion.

House and Senate leaders plan to roll out more specific cuts today, and they appear to be in agreement on the changes.

"The list is very long," House Appropriations Chairman S. Chris Jones, R-Suffolk, said. "There's going to be a lot for everyone not to like (Thursday) night."

After months of stalemate, the bad budget news seems to have forced the hand of legislators who had hoped to use the budget as leverage to win a major expansion of Medicaid, the state and federally funded health insurance program for the poor, elderly and disabled.

Barring a spectacular change, that plan has failed. The pressure to pass a budget, and Democratic state Sen. Phil Puckett's surprise resignation over the weekend, which swung narrow control of the Senate back to Republicans, seems to have put the budget on a fast track to passage.

There was also an important technicality to overcome: the state has a rainy day fund it can tap to avoid the harshest cuts, but because of the fund's rules, that money's only available if the state has a budget in place by July 1, House leaders have said, citing state code.

The new budget is likely to pass tomorrow night and head to Gov. Terry McAuliffe mid next week.

He'll have seven days to suggest changes, but those would have to be approved by the General Assembly. With Republicans firmly in control of the House of Delegates and Democrats' grip on the Senate eroded, he'll have a hard time winning concessions.

The governor's press office said Wednesday that McAuliffe will review the budget and have his say after it hits his desk. After months of tough talk on Medicaid expansion, McAuliffe has been quiet on the issue this week as Republican leaders prepared to maneuver past him.

McAuliffe and Senate Democrats had hoped to see Medicaid expansion, or a quasi-privatized version of it, in the budget, or in a separate bill passed before the budget was finalized. Those hopes appear to be dead.

Instead, House Republicans said they will honor an oft-repeated promise to discuss expansion in a second special session, or during this session, so long as it's after the budget is final.

Senate Democratic leaders, who had girded themselves to take the budget fight past the July 1 start of a new fiscal year, haven't said much this week about their poor turn of fortune. But a caucus spokesman said Wednesday afternoon that Senate Democratic Majority Leader Richard Saslaw, D-Springfield, was cutting a family trip to California short to be in Richmond for Thursday's vote.

State Sen. Janet Howell, D-Reston and a budget negotiator, will delay a long-planned trip to South Africa to be here as well, the spokesman said.

It was unclear how they'd vote on the budget plan, but Republicans appear to have the support they need to move the budget through that chamber regardless.

Expansion efforts center now on state Sen. Emmett Hanger's compromise proposal, which would fiddle with the rules for a committee created last year to examine reforms for the state's current Medicaid system and then decide whether to expand.

Hanger, R-Mount Solon, is one of three Senate Republicans who had been aligned with Senate Democrats in an effort to win some sort of expansion.

He said Tuesday evening that he's "trying to finesse" some of the proposals he made late last month in an effort to get a deal with House Republicans. Among other things, it would "clarify the rules of engagement" on the Medicaid Innovation and Reform Commission to lay out in greater detail just what constitutes enough reform before expansion gets the green light.

Hanger also hopes to weaken the House's ability to continue to block expansion through the MIRC's voting process, but that may be a deal breaker for House Republicans.

"Probably a sticking point for most of our caucus," Del. Steve Landes, R-Verona and a MIRC member, said Wednesday.

Fain can be reached by phone at 757-525-1759.

___

(c)2014 the Daily Press (Newport News, Va.)

Visit the Daily Press (Newport News, Va.) at www.dailypress.com

Distributed by MCT Information Services


For more stories covering arts and entertainment, please see HispanicBusiness' Arts & Entertainment Channel



Source: Daily Press (Newport News, VA)


Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters