eNews February 19, 2018

Monday, February 19, 2018 - 03:36pm

In this issue

House and Senate committees release budgets

House and Senate unveil vastly different budget proposals

It’s not unusual to see differences in the House and Senate budget proposals, but this year’s proposals, unveiled Sunday afternoon, are vastly different in approach, and about $600 million apart in funding levels.

The funding differences came from the diverging approaches to Medicaid expansion. The House wrote into its budget the components of a bill it passed last week – HB 338 (Miyares), which would expand Medicaid to low income adults and would allow the state to collect enhanced federal matching funding (90% federal to 10% state) to help serve this population. The House proposal would include work/training requirements, require co-pays from some individuals, and impose an acute-care hospital tax to help pay state costs.

The Senate went a different route. Using a bill it recently passed – SB 915 (Dunnavant) – it wrote into its budget some provisions to allow increased Medicaid access under an existing Medicaid demonstration program (the Governor’s Access Plan, or GAP) to no more than 20,000 adults with serious mental illness, substance use disorders, or complex medical conditions. This targeted and capped program does not allow Virginia to collect an enhanced federal match. As such, the Senate had to cut in other areas of its budget to replace the Medicaid savings woven into the introduced budget and used by the House in its expansion proposal.

Below are a few highlights of the House and Senate proposals made available Sunday. Much more information will be sent to you later this week, once all the amendments made by the two budget committees are released to the public Tuesday afternoon and the respective chambers vote on Thursday.

Compensation

Pay raises for state and state-supported local employees: The House adds funding to move the 2 percent salary increase for state employees and state-supported local employees up to July 1, 2019. The introduced budget contained funds for a 2 percent increase effective Dec. 1, 2019. The House budget also adds funding for an additional 1 percent merit-based salary increase for state employees (not state-supported local employees) effective June 10, 2019. The Senate eliminates from the introduced budget the funding for the 2 percent salary increase for state and state-supported local employees effective Dec. 1, 2019. It also includes language directing the Governor to include a 2 percent raise in the next introduced budget, if revenues warrant.
Deputy sheriffs: The House adds $1.1 million in FY19 and $3.4 million in FY20 for an additional $1,000 salary increase for deputy sheriffs with law enforcement responsibilities.
Health insurance: The House removes funding in the introduced budget that would have paid for the increased health insurance premium costs for state employees in FY19 and FY20. The Senate recommends that the state absorb the cost of increased costs for state employee health insurance premiums in both FY19 and FY20

Public education

K-12 budget: The House increases the K-12 budget by $98.0 million for the biennium as compared to the introduced budget; about $95.6 million of that is for direct aid. The Senate reduces direct aid to education by $5.3 million in FY19 and $60.0 million in FY20.
Supplemental lottery funding: The House increases supplemental lottery per pupil amount by $43.4 million in FY19 and $48.1 million in FY20. This funding can be used at local discretion for either operating or capital costs, and no local match required.
Teacher salary increase: The House adds $36.4 million to make a proposed 2 percent teacher salary increase effective July 1, 2019; five months sooner than the provision of the introduced budget. The House overview says that the state funding is optional, but that at least a 2 percent salary increase would be required either in FY19 or FY20, or sometime over the two-year period. Take note that the exact wording of the amendment will not be available until Tuesday. The Senate eliminates the 2 percent salary increase proposed in the introduced budget.

Public Safety

State assistance to local law enforcement (HB 599): The House maintained the increases in the introduced budget ($6.6 million in FY19; $13.8 million in FY20); the Senate kept the FY19 increase but cut the FY20 increase down to $6.6 million, a decrease of $7.2 million. In short, the Senate level-funds the FY19 appropriation into FY20.
Medicaid streamlining for jails & juvenile detention: The House picked up the amendments supported by local governments and regional jails to improve data sharing and streamline the eligibility process for using Medicaid for eligible inmates’ inpatient hospital costs and ensuring better connections to services upon re-entry to the community. The Senate budget did not include these amendments, which would save both state and local dollars. The House amendments are based on the current Medicaid program and not the expansion program.

Natural Resources

Stormwater: The Senate package includes $20.0 million in FY19 for the Stormwater Local Assistance Fund. The appropriation is based on bond proceeds issued by the Virginia Public Building Authority. The House amendments do not address the item.

Economic Development

Enterprise Zones: The Senate amendments increase the appropriation for the Enterprise Zone Program by $685,533 each year, increasing the overall appropriation to $13.5 million each year. There are no comparable House amendments.
Virginia Grocery Investment Fund: Senate amendments reduce the new initiative from $3.75 million each year to $1.25 million annually. The House amendments eliminate funding for the new program.

VML legislative staff and assignments

Michelle Gowdy – Local government authority, planning and zoning, legal matters, housing, Freedom of Information, telecommunications and technology. mgowdy@vml.org; 804-523-8525

Janet Areson – Health and human services, and the state budget. jareson@vml.org; 804-523-8522

Mike Polychrones – Environment, land use, natural resources, elections and transportation policy. mpolychrones@vml.org; 804-523-8530

Neal Menkes (under contract) – Taxation and finance, the state budget, transportation funding, retirement, education funding and community and economic development. nmenkes@vml.org; 804-523-8523

Roger Wiley (under contract) – Courts, criminal law, civil law, and procurement. roger@heftywiley.com; 804-780-3143

Chris LaGow (under contract) –Insurance and workers’ compensation. chris@lagowlobby.com; 804-225-8570