House, Senate budget conferees announce conference report agreement, expect final vote on Thursday

state-capitol2House and Senate budget negotiators reached an agreement on a budget conference report over the weekend and expect final votes to be held in both chambers as early as Thursday, General Assembly leaders announced today. The final budget conference report will be placed on members’ desks and posted online Tuesday morning, allowing for the 48-hour review period that House and Senate leaders established as a goal earlier this session.

The conference report includes a $129.5 million pre-payment to the state’s rainy-day fund, eliminates $11.7 million in fees proposed by Governor Terry McAuliffe and provides $153.5 million in funding for a comprehensive compensation package for state employees, state police officers, state-supported local employees, teachers and college faculty.

Speaking about the budget agreement, House Appropriations Committee Chairman S. Chris Jones (R-Suffolk) and Senate Finance Co-Chairman Walter A. Stosch (R-Henrico) said, “Since the end of last summer’s budget stalemate, we have sought to develop a new sense of collaboration and candor in the budget process. We worked together to adopt a supplemental budget last fall, taking unprecedented action to protect our state’s AAA bond rating during a period of deep uncertainty. We began our discussions very early in the process this year, meeting frequently with leaders in our chambers and seeking to reach agreement and consensus wherever possible. The results of these efforts could not be more positive. The budgets released by each chamber were as closely aligned as either of us can ever remember and our conferees have produced a conference report ahead of schedule. The conference report will be placed on legislators’ desks and posted online by Tuesday morning and we expect final votes to be taken as early as Thursday. It is our hope that this agreement can gain broad, bipartisan support in both chambers.”

“I applaud Chairman Jones, Chairman Stosch, Leader Cox, Leader Norment and all of the House and Senate budget conferees for their diligent efforts to complete a conference report ahead of schedule,” said House Speaker William J. Howell (R-Stafford). “I especially want to thank Chairman Jones and Chairman Stosch for the leadership they have demonstrated throughout this process. They have produced a conservative, responsible spending blueprint that wisely includes a rainy-day fund pre-payment, eliminates unnecessary debt obligations and onerous fees proposed by the Governor and invests in our state police officers and teachers. The House will take up the conference report on Thursday, after the 48-hour review period I ordered earlier this session.”

Senate Majority Leader and budget conferee Thomas K. Norment (R-James City) declared, “This budget agreement demonstrates that Virginia’s Republican majority is a governing majority. Since last summer, the House and Senate under Republican leadership have ended a six-month long budget stalemate, taken decisive action to eliminate a budget shortfall and now delivered the final amendments to the current spending plan ahead of schedule. We are working efficiently and effectively, and the results speak for themselves. This is a sound spending plan that includes no new taxes on hard-working families, invests in higher education and provides well-deserved pay raises to state employees, state police officers and our teachers.”

The conference report includes a $153.5 million comprehensive compensation package, funding the state share of a 1.5% teacher pay raise, a 2% college faculty pay raise, and a 2% across-the-board pay raise and compensation adjustments for years of service and to address salary compression for state police and state employees.

“Virginia is fortunate to have thousands of committed state employees whose day-to-day work is integral to the efficient and effective operation of government,” said Senator John Watkins (R-Chesterfield). “This conference report provides them with a well-deserved pay raise and includes funding to address compression for senior employees. It is my hope that this budget shows we are just as committed to them as they are to Virginia.”

“Our state employees work tirelessly to serve their fellow citizens and too often go without the recognition or reward they deserve,” said Delegate John M. O’Bannon (R-Henrico). “Virginia is consistently recognized as one of the nation’s best managed states, no doubt due in large part to the effectiveness of our state employees. The comprehensive compensation package included in this conference report is an effort to recognize and reward them for their hard work.”

The conference report agreement funds the state share of a 1.5% teacher pay raise and deposits $193 million to the teacher retirement fund. This is the second teacher pay raise funded by the General Assembly in the last three years. The conference report also includes $42 million in additional funding for higher education, including $19.8 million to incentivize enrollment and $10.1 million for higher education.

“Supporting our teachers, strengthening our schools and making college more affordable have been central objectives of the General Assembly this year. These goals are clearly reflected in the conference report,” said House Majority Leader and budget conferee Kirk Cox (R-Colonial Heights). “The final budget makes significant investments in higher education, providing an additional $42 million for our colleges and universities, including $10.1 million in new financial aid funding. These efforts demonstrate our clear commitment to strengthening our education system at all levels.”

“As we have worked to reform and strengthen our public school system over the last three years, our emphasis has been ensuring student success in the classroom,” said Delegate Tag Greason (R-Loudoun). “The General Assembly recognizes that the success of our students in the classroom starts with our teachers. The 1.5% teacher pay raise included in our budget, combined with additional funding for professional development and teacher training, is part of a concerted effort to give back to the professionals who give so much to our students.”

The conference report also restores $30 million in funding to local governments cut by the supplemental budget, includes a 2% pay raise for state-supported local employees and deposits $193 million into the teacher retirement fund.

“The House and Senate worked hard to mitigate the cuts to local governments during the budget shortfall,” said House Appropriations Committee Vice-Chairman Steve Landes (R-Augusta) and Senator Emmett Hanger (R-Augusta). “We are pleased to announce today that the conference report fully restores $30 million in funding to local governments, provides state-supported local employees with a pay raise and makes a significant investment in the teacher retirement fund, which is very important to local governments. This is a responsible budget that works for local governments.”

Budget Conference Report Highlights
  • Spends ~$1 billion less in general funds than originally adopted two-year budget
  • Does not raise taxes
  • Pre-pays $129.5 million for 2017 rainy-day fund deposit, restoring balance to ~$429 million
  • Eliminates $11.7 million in fees proposed by Governor McAuliffe
    • Restaurant Inspection Fee
    • VDACS Inspection Fee
    • Weights & Measures Fee
    • Underground storage cleanup deductible
    • Saltwater License Fee
  • Eliminates $33 million in debt proposed by Governor McAuliffe
  • Provides $43 million in funding in order to accelerate funding at 90% of VRS certified rates for the state employee retirement plans.
  • Pays cash for all college capital projects

 

K-12 Education

  • State funding for 1.5% teacher pay raise, including support staff
  • Overall increase of $60 million for K-12 education compared to Governor McAuliffe’s budget proposal
  • Deposits an additional $43 million into teacher retirement fund compared to Governor McAuliffe’s budget proposal, bringing the total deposit to $193 million

 

Compensation

  • Provides 2% across-the-board raise for state police and state employees, including compression for senior classified employees
  • $4 million to rollback cuts to state police overtime
  • 2% pay raise for state-supported local employees
  • 1.5% teacher pay raise, including support staff
  • 2% college faculty pay raise
  • Total compensation package is $153.5 million

 

Local Government

  • Restores $30 million in funding cuts adopted by the supplemental budget to address shortfall
  • 2% pay raise for state-supported local employees
  • Deposits $193 million into teacher retirement fund, saving localities over $30 million in required teacher retirement costs

 

Higher Education

  • Includes an additional $42 million for higher education, restoring 94% of cuts adopted by the supplemental budget to address shortfall
    • $19.8 million to incentivize enrollment
    • $10.1 million for financial aid
    • $5 million for research
  • 2% faculty pay raise
  • $1,000 per student incentive to encourage colleges and universities with low graduation rates to accept transfer students
  • $132 million for capital construction projects at James Madison, Virginia Tech, Longwood, Radford, Virginia Commonwealth University and Danville Community College.

 

Healthcare Safety Net

  • ­­­­$132.9 million for healthcare safety net
  • Funding to provide targeted services to ~22,000 seriously mentally-ill patients, including a prescription drug benefit
  • Nearly doubles operational funding for free clinics – total of $6 million in funding
  • Funds behavioral health community services including three new PACT teams and six new drop-off centers
  • Increases funding for children’s psychiatry and crisis services

 

Other Items

  • $27 million in funding for the Governor’s Opportunity Fund; earmarks $4 million for Jefferson Lab Ion Collider efforts
  • Authorizes bonds to construct two new Veterans Care Centers, one in Northern Virginia and one in Hampton Roads
  • $9 million for housing & homelessness
    • $8 million deposit into the Housing Trust Fund
    • $1 million for rapid rehousing efforts, including $500,000 specifically for veterans