On the 18th day of April, about six weeks after the procedural resolution called for the passage of a budget, Virginia’s General Assembly, together for a Veto Session, finally passed a budget. There is much in the budget to like, some items not to like, and signs for the future that are very worrisome.
The Good
By holding out for a better budget, Senate Democrats achieved a great deal in the final budget. Nearly $45 million was added over the biennium for health and human services. This includes $4.8 million to preserve the healthcare safety net, $6 million to continue long term Medicaid eligibility for 1,500 elderly and disabled individuals in nursing homes, $11.6 million to add 225 Medicaid waivers slots, and $1.6 million to add mentally disabled waiver spots. We also added $69 million for Medicaid payments to nursing homes and hospitals to offset inflation costs, nearly $11 million dollars to increase Medicaid personal care and congregate care rates, and over $3 million to expand children’s mental health services. To pay for some of this, we identified nearly $79 million in savings from a combination of earned federal Medicaid bonuses.
We added about $215 million for public education over the budget as introduced. About $110 million of that amount provides additional assistance for retirement, inflation and prekindergarten costs. Over $47 million was added to update funding for K-3 class size reduction and nearly $7 million, for a correction to career and technical education funding.
Over $122 million was added for higher education institutions for base operations, enrollment incentives and initiatives over the biennium. Included in that amount is almost $43 million for enrollment incentives for new slots at the University of Virginia, College of William and Mary, Virginia Tech and James Madison University. We also included $18.5 million for higher education undergraduate and graduate student financial aid and $6 million for cancer research at the University of Virginia and Virginia Commonwealth University. The budget also provides a salary bonus for faculty members of higher education institutions in December 2012 and August 2013, contingent upon revenue meeting our current projections.
The budget also includes nearly $88 million for the water quality improvement fund to meet the state’s commitment to upgrade 57 local and regional waste water treatment plants in order to meet water quality goals. The housing trust fund is capitalized to the tune of $7 million to help provide permanent solutions for homeless individuals. The budget provides $4.5 million for Civil War battlefield preservation and $4.1 million in restorations to the Soil and Water Conservation Districts.
State employees are slated to receive a three percent bonus in December 2012 and a two percent bonus in August 2013, contingent on revenue projections remaining at the currently projected level. The budget funds 61 district clerk court positions and 23 judgeships statewide.
In sum, the majority of what was sought through the budget negotiations was obtained. Important investments in K-12 and higher education are being made, ensuring our ability to continue to build the intellectual infrastructure to support economic growth in the Commonwealth. We made important restorations in funding to preserve the social safety net.
The Bad
The final compromise is far from perfect. There are plenty of budget actions I do not agree with, including elimination of funding for teenage pregnancy prevention programs and public broadcasting. The biggest failure, however, continues to be on transportation.
Any reader faintly familiar with my tenure in public office knows that I have a keen interest in transportation because it is a critical piece of infrastructure necessary to ensure growth and opportunity in every part of the Commonwealth. I fear that a toll-driven transportation system is one that will further balkanize Virginia. Transportation projects will go forward in those portions of the state where money can be raised through tolls, and economic growth will not occur evenly throughout the Commonwealth. I think that under that type of system, the rich will get richer and the poor will get poorer. Frankly economic opportunity in southwest, western and central Virginia is dependent upon our ability as a Commonwealth to fund a 21st Century transportation system. I know that many of my friends see this issue as one that is primarily important to Northern Virginia and Hampton Roads, and it is true that those are the fastest growing parts of Virginia and have the most urgent needs. However, 40 percent of Virginia’s bridges and tunnels are structurally deficient, and those faulty bridges and tunnels are not just in Northern Virginia or Hampton Roads. We must be willing to invest in transportation projects throughout Virginia.
We held out as long as we could to try to force a transportation “fix” through the budget process. The development of a long term transportation solution was a long shot this year but it is going to be a long shot any year. Ultimately, we were not successful. So we will live to fight another year.
Further, many of our budget decisions have placed increased responsibility on local governments. It is easy for the Commonwealth when we face a mandate from the federal level to complain and blame it on someone else. The truth is Virginia often passes responsibilities on to local government. This year, dramatic changes were made to the Virginia Retirement System. A new hybrid plan was created which will ultimately require an employee contribution greater than the five percent in the current defined benefit plan. Recent and new hires will also see reduced retirement benefits. Much of the cost of these changes was passed onto local governments.
The Ugly
On the 17th of April, the Democratic Caucus in the Senate, 20 strong, voted against the budget because we were trying to force a transportation solution. The next day one of our members voted for the budget. There has been much thought and some hurtful things that have been said over the days since the budget passed. Senator Colgan, the lone Democrat who voted for the budget, has given his life to the service of our country and our Commonwealth. He simply did what he thought was right. The other nineteen of us had no idea that he was going to make that decision but in retrospect, we probably should have known. We achieved much of what we wanted in this year’s budget process however big challenges are ahead, as we continue to kick the transportation can down the road.
Virginia had prided itself for decades on fiscal discipline and completing the people’s work on time. To a large degree, we have been the opposite of our federal counterparts in Washington DC, working across party lines to move Virginia forward. Unfortunately, that is changing. The budget fight this year harkens back to earlier budget fights back in 2001, 2004, 2006, and 2008 that saw extended deadlocks. We could truly be experiencing a new sort of normal in budget negotiations. In my view, this is not a positive development. We need to focus on the big picture, on moving Virginia forward, and on creating opportunity in every corner of the Commonwealth. The tenor of this session was set on the very first day by the refusal of 20 Republican senators to engage in a power-sharing agreement that reflected the 50-50 representation voted in by the citizens of the Commonwealth. I, for one, do not think Virginia will be better off for the partisan wars to follow.
Creigh Deeds is a member of the Virginia State Senate.
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