Richmond Update: Governor's Amendments
It's been a month since the General Assembly adjourned on Saturday, February 23rd.
The Constitution of Virginia states that "the General Assembly shall reconvene on the sixth Wednesday after adjournment . . . for the purpose of considering bills which may have been returned by the Governor with recommendations for their amendment."
This means that I will be returning to Richmond next Wednesday, April 3, to act on the Governor's amendments to bills that passed the legislature this year.
Earlier this week, Governor Bob McDonnell announced his recommendations for amending a number of bills, including two of the most significant measures of the session: Transportation and Medicaid reform.
You may recall from my earlier emails and from press reports that the General Assembly passed a comprehensive transportation bill that will provide a long-term sustainable source of new revenues to address the much-needed funding gaps.
The passage of House Bill 2313 was something that few people thought would be possible, considering that it's the last year of an outgoing Governor, and the entire House of Delegates will be up for election along with statewide offices.
And since the General Assembly has failed to find a transportation funding solution for over 27 years, the probability was high that this year would be no different.
I have previously praised Governor McDonnell for his leadership in pushing a transportation solution this year. Without his willingness to put new taxes on the table, I highly doubt that a package worth over $1 billion could have come out of a Republican-controlled House.
In response to Gov. McDonnell opening the door to raising new revenues, I worked in good faith to move a legislative vehicle along.
I ended up providing the critical bipartisan vote needed to pass the Governor's bill out of the House Finance Committee. My committee vote gave this bill the chance to be brought to the floor for a full debate and amendments to be offered.
Although there were many parts of the bill I did not like — such as the new tax on hybrid vehicles — I believed the overall package was worth supporting. The final version of the bill was crafted with true bipartisan compromise, and we urged the Governor to not alter the substance of the package significantly beyond eliminating the hybrid tax.
This week, I commend Gov. McDonnell for offering amendments that maintain all the major components of the bill while addressing some of the potential Constitutional concerns raised by the Attorney General and others.
The Governor did offer some amendments to reduce the amount of some taxes that were included in the bill. These tax cuts were no doubt in response to the enormous pressure that Gov. McDonnell received from Grover Norquist and others in the no-tax wing of his political party.
Specifically, the Governor proposes the following substantive amendments to some of the taxes that were increased in the bill that passed the legislature:
-- Reduce the car titling tax from 4.3% total down to 4.15%. This is the sales tax that a consumer would pay when purchasing a car in Virginia, which is lower than the 5.3% regular sales tax rate applied to purchases of other goods.
-- Reduce the real estate grantor's tax for Northern Virginia homes from $0.15 per $100 in property value to $0.15 per $100.
-- Reduce the "Transient Occupancy Tax" for hotel rooms in Northern Virginia from 3% to 2%.
-- Reduce the Alternative Fuel Vehicle Fee from $100 to $64 per year. The original basis for the $100 fee in the Governor's bill was based on the current gas tax rate of 17.5 cents per gallon. Since the legislature switched the tax from the pump to the wholesale level and reduced it to approximately 10.5 cents per gallon, the Governor proposes to reduce this hybrid tax by about the same ratio, or 36%.
The reduction in statewide funding through these amendments amounts to approximately 0.5% of the estimated statewide transportation program by Fiscal Year 2018.
In addition to the transportation funding bill, the other significant development in this year's General Assembly session was the inclusion of language in the budget that could potentially expand Medicaid to cover more uninsured Virginians.
This was a funding offer provided by President Obama's healthcare reform law, more commonly referred to as "Obamacare." Many states have agreed to take advantage of the new federal funds to cover their states' uninsured population who cannot afford healthcare on their own.
Unlike some of his fellow Republican Governors in states like Arizona, Florida and Ohio, Governor McDonnell had decided to not accept the federal funds to expand Medicaid.
The Democrats in the General Assembly successfully pushed to add language in the budget bill to create a new Medicaid Innovation and Reform Commission (MIRC) which would be authorized to approve Medicaid expansion in Virginia if certain conditions were met.
This language was as far as Governor McDonnell was willing to go to create a pathway for Medicaid expansion in the future.
However, during the House debate and since the budget bill passed, there were questions raised about the constitutionality of the MIRC's role. In particular, the Attorney General issued an opinion last week asserting that in his view, delegating final legislative authority on Medicaid expansion to the MIRC was unconstitutional, because many of the preconditions to expansion were too vague.
The Governor's proposed amendments would add several items to the list of conditions that must be met before the MIRC can proceed to approve the expansion. The Governor believes this change will help the language avoid any constitutional issues.
I believe that both sets of amendments that the Governor has proposed are worthwhile and they improve the chances that the underlying bills could withstand constitutional challenges. More importantly, they do not alter the substance of these two measures in any significant ways.
Based on what I have read so far, I plan on supporting the Governor's amendments to these two items. If a majority of my House and Senate colleagues vote with me, then these two bills will become law effective July 1, 2013.
I will update you on these and other developments when I am in Richmond next week. And in a week or two following the reconvene session, I plan to hold a public town hall meeting to report to our constituents on various legislation that came up during this session. Please be on the lookout for that meeting.
In the meantime, I hope you and your loved ones enjoy Easter, Passover or Spring Break!
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