Shortly after being sworn into office in January, I got an up close and personal opportunity to witness:
• A State of the Commonwealth address delivered by an outgoing Governor about to be indicted.
• The inaugural of a new Governor and Lt. Governor
• A tight recount in the Attorney General’s race that some thought would be decided by the General Assembly
• Two special elections for State Senate followed, leading to a mid-session power shift in the State Senate.
• A special election in the House of Delegates.
• A budget impasse, followed by a special session on the Budget called by the Governor
• The resignation of a State Senator under questionable circumstances that gave control of the Senate back to Republicans followed by a midnight session to finally pass a budget.
The budget that the General Assembly sent to Governor McAuliffe closes a two-year $1.5 billion revenue shortfall by maintaining spending at last year’s level and drawing heavily on the Commonwealth’s rainy day fund, and does not provide money or a mechanism to expand Medicaid to close the coverage gap affect 400,000 uninsured Virginians.
I voted no to the budget deal agreed to by Republican leaders in the Senate and House because it fails to draw on $1.8 billion in federal funds available to the Commonwealth under the Affordable Care Act to close that coverage gap. Given the fiscal situation the Commonwealth finds itself in, I found that decision to be unconscionable. These funds would have provided health care coverage to the working poor, created an estimated 30,000 well-paying jobs and prevented hospitals from having to close their doors.
All at a time when Virginia tax revenues are predicted to be down this year by $870.9 million out of a $17.165 billion yearly discretionary budget.
One of the major sources of the revenue shortfall was that final tax payments for tax year 2013 fell 26% compared an assumed flat forecast. This is largely attributable to Virginians deciding to realize capital gains at the end of 2012 as the result of uncertainty about future capital gains rates created during “fiscal cliff” negotiations at the federal level.
The taxes on those 2012 transactions came due in May of 2013, inflating our revenue collections based on a one-time phenomenon. Unfortunately, the outgoing administration failed to recognize the one-time nature of the revenue spike and built a budget around the assumption that the level of collections would remain unchanged. When data on actual receipts for 2014 became available it was clear the projected revenue was not materializing.
To keep the budget balanced, we will need money from the rainy day fund, level fund state agencies across the board and, on top of that, cut hundreds of millions in new spending included in Governor McDonnell’s proposed budget. Some examples include a 16% cut in Administration, Finance, Legislative and Judicial areas; a 14% cut to K-12 spending, and a whopping 23% reduction in higher ed spending.
Some areas of the budget were protected:
• Funds were included for K-12 Education “re-benchmarking.” This resulted in an additional $18,633,000 for our Fairfax County Public Schools. Roughly $104.24 per student.
• $184 million to our Virginia Colleges and Universities. This includes $6.2 Million to add more than 1,700 new in-state slots.
• $37 million to fund improvements in Virginia’s Mental Health system in the wake of the tragedy that lead to the death of Senator Creigh Deeds’ son Gus.
• $56 million in Medicaid “waivers” to help those with both intellectual and physical disabilities move to group homes.
• $97.6 million to continue to fully fund Virginia’s State Employee Retirement System.
Finally, we included an increase in funding to the State Employee Health Insurance plan, which means members of Virginia’s part-time legislature will continue to enjoy one of the richest and most robust employer provided insurance policies money can buy, but we did not include any mechanism to allow the Commonwealth to close the coverage gap.
Delegate Simon represents the 53rd District in the Virginia House of Delegates. He may be emailed at DelMSimon@house.virginia.gov