Martinsville Bulletin, Inc.
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Martinsville, Virginia 24115
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Monday, February 22, 2010
By THE ASSOCIATED PRESS -
RICHMOND — The House of Delegates on Sunday proposed a dire new state budget that slashes Medicaid funding and eligibility, and increases school class sizes while reducing public school funding, while a competing Senate plan also calls for big cuts to Medicaid but restores many of the cuts to education.
The House Appropriations Committee voted 15-7 Sunday for a spending blueprint through 2012 that cuts about $1.5 billion compared with Republican Gov. Bob McDonnell’s suggested cuts last week topping $2 billion.
It rejects McDonnell’s proposal to impose five unpaid days off for state employees, spares further cuts to colleges, kills a proposed out-of-pocket employee retirement contribution and provides a 2011 Christmas bonus.
The Senate Finance Committee passed its version of the budget that called for more than $700 million in cuts, made possible by a plan to save $500 million by contributing less than expected over the next two years into the retirement fund for teachers and state employees.
The Senate plan restores dramatic cuts to education, free medical services and law enforcement by contributing less than expected into the state employee and teacher retirement fund. It calls for three unpaid furlough days for state employees in each of the next two years and also includes the 2011 bonus.
Both versions substantially restore deep cuts Democratic former Gov. Timothy M. Kaine had proposed in the budget he offered in his term’s dying days to public safety spending, local sheriffs and regional jails.
The state is struggling to reconcile a $4 billion revenue shortfall, the lingering effect of an economic collapse that has caused an unprecedented erosion in state tax collections since 2007.
A major feature of both House and Senate versions of the budget is that they retain the 12-year-old program by which state government — not car owners — pay most of the local tax levied on personal cars and pickup trucks. The state takes $950 million annually from its general fund to reimburse city and county treasuries for the revenue lost to the 1998 law that was intended to phase out the deeply loathed car tax.
The brunt of the House cuts falls on health care for the needy, elderly and children in the budget bill that advances to a vote Thursday on the House floor.
Nearly $200 million is cut from Medicaid, the federal-state partnership that pays for health care for the indigent, aged, blind and disabled, and for low-income families with children, and from FAMIS, a program that provides low-cost health insurance for the children of the working poor.
Hospitals, nursing homes, doctors and other people who provide services under Medicaid would see their reimbursement rates drop by $125 million the next two years. And eligibility for both FAMIS and Medicaid would also be tightened, eliminating some higher-income families who now qualify.
Cuts up to 5 percent await dental and physician services, personal care assistants who provide care to homebound recipients among others. The same cut is in store for local health departments.
The Senate version calls for $344 million in cuts from health and human resources, most of which would come from cutting provider rates and Medicaid eligibility. Committee members said they hoped a six-month extension in federal stimulus dollars would allow them to go back in and restore that funding.
It would restore funding to free medical clinics, community health centers and dental services for the poor.
Both the House and Senate restore money to operate the Commonwealth Center for Children and Adolescents, an acute care mental health center in Staunton. The Senate cuts funding for a similar center in Marion.
In public education, House reductions total about $620 million, spread equally over the 2011 and 2012 budgets. But the blow is mitigated by reducing the amount local school districts have to contribute to employee pensions by about $270 million each year. As a result, the committee said, actual cuts to kindergarten through grade 12 come to only about $80 million for the two years.
Class sizes would increase by one student.
Much of the savings comes from eliminating a secondary planning period for teachers that would save more than $185 million annually the next two years.
In the Senate, public education would be cut $133 million, with delayed implementation of new standards of accreditation and the elimination of any testing that is not absolutely necessary.
The state’s colleges and universities would not receive further cuts.
Some of the governor’s proposals are reflected in both budgets. The life of school buses expands from 12 years to 15 in the House budget. Both reject Kaine’s proposal to freeze the local composite index, a formula by which state school dollars are apportioned to local districts, a move McDonnell rejected his first week in office.
But the House rejected McDonnell’s proposal to pare subsidies for non-teaching jobs, including sports coaches and department chairs.
The House budget also eliminates about $145 million in fees that Kaine had proposed in his budget in December.
In the shoulder-to-shoulder, standing-room-only rooms where the committees outlined their budgets, advocates for health services, schools and local government sat dismayed.
“These cuts to everybody are profound,” said Katharine Webb, a lobbyist for the Virginia Hospital & Healthcare Association. “We’re changing the way services are delivered — all services to everybody.”
One way or another, tax increases the state is avoiding will eventually surface in higher local taxes, specifically higher real estate tax rates, said Mary Jo Fields, director of research for the Virginia Municipal League, which represents the cities and a few county governments.
“People have these expectations that their services will just go on and it won’t cost money,” she said. “They won’t. Someone has to pay for them. There is no free lunch.”
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