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Budget break eludes state

Friday, May 30, 2014

From Bulletin staff reports

Virginia will be entering “unknown, uncharted waters” if a state budget is not approved by July 1, according to Del. Charles Poindexter.

That is when the new fiscal year starts for the state as well as its counties and cities, which depend on knowing how much state revenue they will get.

Virginia has never entered a budget year without having adopted a budget, said Poindexter, R-Glade Hill. But this year’s budget is at a standstill over a disagreement about whether the state should expand Medicaid to an additional 400,000 Virginians.

Poindexter said it is imperative that Medicaid expansion be set aside from other budget issues and addressed in a special session if there is to be any hope of a state budget passing.

Medicaid expansion, he said, is a “huge policy issue, not just a budget issue.”

Del. Danny Marshall, R-Danville, said the state constitution stipulates that state money that has not been appropriated for a fiscal year generally cannot be spent, creating the need for a budget to be adopted soon.

Local lawmakers had no indication of when a special legislative session will be called to address budget issues.

“There is no negotiation between the Senate and the House” right now, Marshall said, so “you’ll have to ask the governor that.”

“We’re ready to go” back to Richmond, he said of lawmakers.

State Sen. Bill Stanley, R-Glade Hill, added: “I don’t have a lot of hope (of resolving the budget impasse). I think everyone’s stuck” in their positions. ... “At some point we’ve got to start finding solutions instead of digging our heels in.”

Having a background in local government, Poindexter said he understands the concern local governments have about the lack of a state budget as July 1 approaches.

Local governing boards and school boards are having to “take a guess as to how much money they will receive” from the state, as they are legally required to pass budgets by June 30, he said.

Both the Henry County Board of Supervisors and Martinsville City Council, as well as the county and city school boards, have adopted budgets.

Poindexter said that in his opinion, Gov. Terry McAuliffe has made two conflicting statements: He originally stated that he would not consider a budget that did not include Medicaid expansion, and then he later stated that he would not allow the state government to be shut down over Medicaid expansion.

Poindexter believes that a point has been reached where those two statements are mutually exclusive.

Also, he said, polls conducted by Christopher Newport University have indicated that most Virginians oppose Medicaid expansion.

Poindexter added that in his opinion, national polls indicate that most Americans are opposed to the Patient Protection and Affordable Care Act, popularly referred to as “Obamacare.”

“This debate needs to be separated from the budget,” he said.

Del. Les Adams, R-Chatham, said he agrees with Poindexter that Medicaid should be addressed in a special session and should not be part of discussions to get a budget adopted.

“I think it’s worth noting that has been the offer from the House of Delegates for some time now,” Adams said.

“We’re not saying wait until next year to make your case. We’ll have a special session on this” at that point, he said. “Let’s help the localities. Let’s help the people so that we can end this uncertainty at the local level.”

Since returning from the General Assembly, Adams said, he has heard from more than 85 different localities that have passed resolutions asking for the state to pass a budget.

“I think the people have certainly made their voice known,” he said. “They don’t want the politics of any issue to hold up the passing of a budget.”

“I guess in terms of my thoughts,” Adams said, “I’ve been very disappointed to see how those who are pushing for Medicaid expansion are holding the budget in order to try to sort of coerce this public policy objective.”

He said he would encourage local government officials to write to McAuliffe and the state Senate and urge them to pass a budget.

Marshall said he thinks McAuliffe technically would break the law if he does not take action to get a budget adopted by July 1. However, he said he did not know what, if any, penalties the governor would face.

If no budget is adopted by July 1, many local and state functions might stop, Marshall indicated.

Under state law, only the governor, lieutenant governor, attorney general and state Supreme Court members can get paid if there is not an approved budget, he said.

Government employees funded by the state, including prison guards and some teachers and police officers, will not get paid, he said.

Published reports have shown that officials anticipate a state budget shortfall of up to $1 billion. Asked to comment on a potential shortfall, Marshall simply said “we’ll have to see” how revenues come in during the next few months.

Marshall also expressed concern that “if we keep fooling around” and waiting to adopt a budget, “we (the state) could lose our AAA bond rating.” That is the highest rating issued by credit rating agencies showing credit worthiness.

Stanley called the projected budget shortfall “a real problem” that may require drastic measures. Some of that is because by law, any savings from expanding Medicaid has to go into a trust fund in case federal support for the program lags, and the state is past the time when the rainy day funds can be appropriated.

 

 
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