My votes on the 2010-2012 Budget
Coming into this year's General Assembly session, we faced two serious challenges in drafting the budget.
First, we had to meet a $4.5 billion shortfall in the two-year base budget. We had to address a $1.6 billion cut that outgoing Governor Tim Kaine proposed to eliminate for reimbursing local governments with car tax relief. We also had to fill the $2.9 billion gap for when the federal stimulus funds run out for enhanced Medicaid match program.
Second, we were told in no uncertain terms by our new Governor, Bob McDonnell, that "if you pass a bill in this recession that raises taxes on the hardworking families of Virginia, I will veto it. And if you pass a budget embedded with those same tax increases, I will not approve it."
The House of Delegates proposed a budget that met both goals. First, the House eliminated about $145 million in various "fee increases" that were included in Governor Kaine's introduced budget so that Governor McDonnell can meet his political goal of "not raising taxes."
Without any new sources of revenue, however, the budget has to be balanced on the spending side only. The House budget makes drastic cuts to public education, by almost $500 million in addition to the $800 million in cuts that Governor Kaine proposed. These cuts are in numerous changes, such as allowing local schools to increase class sizes, waive staffing ratios for certain programs, and suspend secondary planning period.
These and other "structural reforms" in the way state funds K-12 programs are more than budget decisions. They change policies. For example, the House takes four separate programs designed to support at-risk kids and combined them into one smaller block grant which would be redistributed based on a per-pupil basis rather than by student need. The practical impact would be to leave local schools with less flexibility to implement programs while giving them less funding to help kids who need it most.
The House budget does include the "unfreezing" of the Local Composite Index which would restore about $61 million in cuts that Fairfax schools would have had under Governor Kaine's budget. But it also harms Fairfax schools by reducing the "cost of competing adjustment" funds we use to attract teachers to high-cost areas. House also cuts about $20 million in financial aid for public college students.
On social services and healthcare, the House budget would cut Medicaid by $400 million and reduce Medicaid provider rates by 5%. Virginia already ranks 48th in the nation for our Medicaid funding per capita. This cut would guarantee that we remain at the bottom of the list while hurting low-income children, pregnant mothers and the elderly who have no other options for receiving quality healthcare.
On public safety, the House budget cuts significant funding for local police, takes away state contributions to local drug courts and reduces support to the judicial system.
Finally, the House attempts to balance its budget by including numerous tax incentives to promote job-creation and economic development, by adding a controversial reform proposal for the Virginia Retirement System that its proponents believe will result in savings of about $800 million over two years, and by providing a rosy future economic forecast that would provide an additional $200 million in revenues over three years.
Because of these serious cuts and what I believe are misplaced priorities, I voted against the House budget when it came to the floor on February 25.
The Senate version is dramatically different. First, it restores many fees that were eliminated from Governor Kaine's budget to help offset the deep cuts in spending. Of course nobody likes to ask the public to pay more for services. But these fees are specifically targeted to the services sought, such as court filing fees, so that they are for people more willing to pay for services.
The Senate's cut to education are approximately $340 million less than the House, and also includes the LCI fix for Fairfax schools. The Senate protects higher education cuts.
The Senate budget is better for safety net programs as it restores $86 million in Medicaid funding while marginally increasing the provider reimbursement rate.
The Senate bill restores cuts to local police by closing an extra state prison and by freezing the recruitment of new state troopers.
Finally, unlike the House budget, the Senate uses funds to promote jobs creation to instead pay for education and social services while also restoring modest funding to keep open state parks and the Commission for the Arts among other smaller programs.
On balance, I voted to support the bipartisan Senate budget which came to the House floor on March 3. I believe this budget maintains a better balance and priorities on both sides of the ledger to fund what the core functions of government.
The next step is for the budget conference committee to agree on the final budget. The conferees are negotiating to meet the deadline of March 13 when the General Assembly adjourns our regular session. To keep up with its progress, please visit: http://leg1.state.va.us/ and click on "State Budget."