RICHMOND — House and Senate budget writers on Sunday unveiled competing spending plans that would give state employees a pay raise, provide Gov. Terry McAuliffe with extra cash to lure new businesses to the commonwealth and offer more care to severely mentally ill Virginians.
Both panels also rejected Medicaid expansion, bucked the Democratic governor’s bid to hike some business fees, and poured more money into K-12 education, public universities and the state’s rainy day fund.
The House and Senate plans differ in the details, but they are far closer than at the start of the budget process last year, which wrapped up months past deadline and only as Virginia teetered on the verge of a government shutdown.
McAuliffe, whose renewed bid for Medicaid expansion never had a chance this year, was eager to get on board with both plans.
“I am encouraged to see both chambers agree with my priorities, including funding care for the seriously mentally ill, avoiding cuts to K-12 and further cuts [to] higher education, funding the First Lady’s school breakfast initiative and using increased revenues to offer state employees and teachers a much-needed raise. I look forward to working with the legislature to finalize the budget we need to build a new Virginia economy,” McAuliffe said in a statement issued Sunday afternoon.
When they rolled out rival budgets early last year, the two chambers were sharply divided over whether to expand Medicaid under the Affordable Care Act, then McAuliffe’s top legislative priority. The disagreement led to a budget standoff that dragged on until June, just weeks from the start of the fiscal year July 1.
McAuliffe (D) also called for Medicaid expansion in his current budget, saying there was a need to provide heath care to 400,000 uninsured Virginians. But last year’s seemingly intractable sticking point was quickly dispensed with this time around, as both the House and Senate budget committees flatly rejected expansion.
The House and Senate plans both offer funding to address unmet medical needs, though on a much smaller scale. The Senate Finance Committee embraced McAuliffe’s more modest “Healthy Virginia” plan to expand health care to about 20,000 severely mentally ill people. The House Appropriations Committee, meanwhile, has a somewhat different plan to serve 30,000 mentally ill people.
Nearly halfway through the General Assembly’s 46-day session, the House and Senate committees held back-to-back meetings Sunday to approve their budget plans and send them on to their respective chambers.
The General Assembly passed a two-year, $96 billion state budget last year. This year, the legislature and McAuliffe are proposing adjustments to that plan to cover the second year of the budget, which begins July 1.
The heaviest lifting of that budget rejiggering has already been done. McAuliffe and the legislature were prompted to take early action last year when they became aware of a projected $2.4 billion revenue shortfall. They closed most of that while in special session in September. Since then, the revenue picture has brightened.
Both budget panels have taken improved revenue forecasts into account as they decide how much money to spend. But the budget committee for the Republican-dominated House is sticking to more conservative projections than the Senate, where the GOP has several moderate members and a slim majority.
Both the House and Senate budgets provide a 3 percent pay raise for state employees, including state police, and a 2 percent raise for state university faculty. They also include the state’s share of a 1.5 percent increase in teacher pay, which local school officials have the option of matching.
The House makes its raises contingent on revenue meeting a new, improved forecast.
McAuliffe did not call for raises in his budget, although he has said he would welcome a way to do it. He included a 2 percent raise for state employees in last year’s plan — ultimately rejected — that relied on an infusion of federal funding from Medicaid expansion.
McAuliffe also had called for increasing a series of business fees, including restaurant inspection fees, to raise about $10.2 million. The House proposal eliminates those hikes. The Senate plan goes along with McAuliffe’s fee increases, but it trims them so they would raise $3.6 million in new revenue.
The House and Senate budgets would boost the amount of money McAuliffe would have at his disposal for economic development, but not by as much as the governor would like.
In health care, the Senate stepped back from its support last year of a form of Medicaid expansion, but it supported McAuliffe’s fallback “Healthy Virginia” program. The House has signed on to two aspects of that plan: covering dental care for 45,000 pregnant Virginians and extending health care, under the Family Access Medical Insurance Security program, to the children of low-income state employees.
But the House is not in step with the governor and Senate in the area of mental health care. McAuliffe has created the Governor’s Access Plan, or GAP, as a way to provide medical and mental-health care for 20,000 of the state’s most severely mentally ill. House leaders have questioned his authority to create the program without legislative approval and oppose its reliance on federal funding.
The House’s alternative would provide psychiatric care to 30,000 mentally ill people. It would not provide them with broader health care, but would offer a prescription drug benefit that would cover medications for both psychiatric and physical ailments. The House proposes addressing unmet medical needs with an extra $3 million for free health clinics.