Thursday, December 21, 2017

The Governor's Budget

It’s going to be a much different year in the Virginia House of Delegates in 2017 with Democrats having secured at least a 50-50 tie in the Chamber pending the outcome of a disputed election in Fredericksburg.

Democrats seem likely to be in a position to insist on a power sharing arrangement that allows us to Chair committees and possibly control the speaker’s gavel. As of this writing many of those details remain to be worked out, but be assured that I will revisit them in upcoming columns as session approaches.

Meanwhile, earlier this week outgoing Governor Terry McAuliffe unveiled his final biennial state budget, and in it, his last and best effort to provide health care to the over 400,000 Virginians who make too much money to qualify for traditional Medicaid coverage and not enough to afford even subsidized insurance in a health care exchange or in the open market by expanding Medicaid in Virginia.

The two-year budget plan relies on savings that will be realized only if we accept the roughly $6 million dollars a day that Medicaid expansion would provide and use it to pay for essential services that we've paid for from the General Fund instead for the last four years.

Two years ago, the Governor introduced a budget that used the savings to be realized from expanding Medicaid to lower the state's corporate tax rate. The thought was that Republicans love a good corporate tax cut more than they hated Obamacare, and that would give them cover to accept Medicaid expansion while doing something that would help McAuliffe lure more companies to Virginia to help diversify our economy.

Only he miscalculated. It turned out Republicans hated Obamacare more than they loved the idea of cutting corporate taxes.

This year the approach is different, and with the new make-up of the General Assembly, which now likely includes at last 50 Democrats, and possibly 51 depending on the result of pending recounts and lawsuits, it just might work.

Overall, things are looking good. Revenue forecasts are looking up and our unemployment rate is down to 3.6% - the lowest in nearly a decade. General Fund collections exceeded the official forecast by more than $134 million. Over the next biennium, the General Fund revenue forecast is just over $42 billion.

The Governor’s top budget priorities are funding vital public services like the Standards of Quality for public education and the existing Medicaid program.

Other highlights from this year's budget include:
  • Funding to automate the teacher license application system and to support principal recruitment and retention in our hardest-hit school divisions.
  • Updating Virginia’s education formulas including the Standards of Quality, which will add $436 million in education funding over the next two year.
  • In the area of workforce development, $1 million in new funding is added to the budget for two-week cybersecurity camps dedicated to exposing high school students to careers in this rapidly growing industry.
  • Children can’t learn if they are hungry, so we’ve added $2 million to support our breakfast incentive funding, which has dramatically improved participation in our high-need elementary schools.
  • There is $4 million in increased funding for the New Economy Workforce Credential tuition assistance program to address the high demand of students wishing to participate in the program.
  • In an effort to make Virginia a little greener, $2 million to support the development of the solar industry in Virginia. $110 million in Commonwealth Transportation Capital Projects Revenue Bonds for mass transit projects in FY 2020 to maintain the state’s commitments to these services.
  • In addition to expanding Medicaid, the budget provides Full funding for the revised Medicaid forecast for foster care and adoption programs and Children’s Services Act caseloads as well as funding to support 825 additional Medicaid waiver slots over the course of the biennium for individuals with intellectual disabilities.
  • I’m excited about funds that will allow Virginia to continue to make strides in the way we treat people living with Mental Illness in Virginia, including $11 million to begin primary care screening and monitoring at the Community Service Boards, $1 million for the creation and expansion of mental health dockets in jurisdictions with high caseloads, $2.9 million to establish special units and programs for seriously mentally ill inmates and $10 million to support medication-assisted treatment for individuals who seek help with opioid addiction, through our Community Service Boards.
  • Finally, the budget includes a 2% raise for state employees, including teachers, law enforcement, and state agency workers.
In year’s past a budget that includes these priorities might have been viewed as Dead on Arrival. With a 50/50 House of Delegates, well, not so fast. Should be an interesting session.