The most important thing the General Assembly does is craft a state budget. This week, we in the House of Delegates passed a conservative, balanced budget that does not include general fund tax increases. I will use the entirety of this weekly update to share with you several highlights from the state budget as they pertain to key issues of state funding.
How the Virginia Budget Works
Virginia has a two-year budget cycle that starts in even numbered years. The budget presently under consideration, if passed by the General Assembly and signed by the Governor, will go into effect July 1, 2018.
The Governor (in this case outgoing Governor Terry McAuliffe) proposes the original budget, which is then amended by the House and Senate. Each chamber will debate and pass their own version of the budget. Because these two versions are drastically different, final budget negotiations take place in a conference committee. The conference committee will iron out the differences between the House and Senate budgets to create a final product that will again be voted on by the House and Senate. This final product, known as the conference report, goes to the Governor for signature when passed by both chambers.
The state budget is comprised of “general funds” and “non-general funds.” The non-general fund is made up of revenues that go to a specific purpose, such as gas tax revenue for transportation and designated higher education funding for college tuition. The General Assembly has little control over how these dollars are spent. The general fund is made up of revenue from most state taxes, like the income tax or sales tax. General fund dollars are used to fund things like K-12 education, higher education, and public safety. The non-general fund comprises about 60% of the budget while the general fund comprises the remaining 40%.
Lastly, our state constitution requires that the budget be balanced. We cannot spend more money than we take in. This is the opposite of budgeting in DC where Congress seems to print more money in order to fund new projects.
The House budget includes no general fund tax increases. This session alone, House Republicans have voted down over $770 million in new tax proposals.
The budget is structurally balanced, ensuring that Virginia maintains its coveted Triple-A bond rating and long-term fiscal health. Virginia is consistently rated as one of the best financially managed states in the nation. Our strong financial postures makes it easier for businesses to grow and thrive in our Commonwealth.
The House budget placed $91 million in a revenue cash reserve, bringing the balance to $248 million. This is in addition to our already substantial rainy day fund balance. These actions will be strong signals to bond rating agencies who set our Triple-A rating.
As a retired teacher, I know that money allocated to K-12 education is well spent. I am working to ensure that state dollars go directly to our students in the classroom. Our House budget exceeded the Governor’s proposed budget in the K-12 field by $98 million. We increased the amount of lottery proceeds going to local schools to $91 million. These lottery funds have no strings attached and are spent on however the local school board deems worthy. On top of this, the House budget allocates $3.4 million for security upgrades, like buzz-in systems, cameras, and hiring school resource offices, in schools across the Commonwealth that will help to keep our children safe while learning.
I am often asked to support a pay raise for public school teachers. I’m proud to report that this year’s budget includes a 2% pay raise for just that. This year’s pay raise is the fifth raise Virginia’s teachers will receive since 2013. Since the Great Recession, over $1.5 billion in new money has been invested in K-12 education.
Virginia has one of the best systems of colleges and universities in the entire country. Our House budget ensures that Virginia students from all walks of life can have access to a quality education.
The House budget provides $30 million more in higher education funding than originally proposed by Governor McAuliffe, which represents an increase of $152 million from the previous budget. In addition to an increase in funding, the House budget increases financial aid funding by $45 million and provides $1.8 million in Tuition Assistance Grant (TAG) funding. Our House budget also provides funding to expand the newly established Online Virginia Network (OVN) to help make it easier for working parents and non-traditional students, such as active duty military members, to receive a college degree.
Growing Our Economy
Instead of flashy headlines and handing out oversized checks at job announcements, the House focused in recent years on reforming the fundamentals of how we invest in economic development. Our budget builds on that long-term approach to foster innovation, entrepreneurship, and business growth that will lead to good paying jobs for Virginians.
The Port of Virginia is one of the largest economic drivers in our state. The House budget provides $350 million to dredge the port, making it wider and deeper, so that new supermax container ships can dock in Virginia. The logistics companies and supply chains located around the Commonwealth that support the Port will feel the positive effects of this investment. Knowing that in the 21st century broadband access is a necessity for businesses, we included $4 million in funding for broadband development. Wise investments such as these are key to growing our economy and workforce.
Our men and women in the law enforcement field deserve our support. The House budget makes a significant commitment to keeping our communities safe.
The House budget provides $18 million in new “599 funding” to make sure local law enforcement has the necessary tools to fight crime and protect our communities. Our budget funds a new, 10-member tactical team as part of the State Police’s Special Operations Division so that we can be ready to respond to unique threats that are part of this ever changing world.
Additionally, the House budget includes a pay increase for corrections officers. By increasing pay, we can reduce employee turnover and save taxpayer dollars in the long run. These are hard-to-staff positions but are of vital importance to our state.
The House budget provides a 2% pay raise for our hardworking state employees, as well as a one time 2% bonus. This is an important step toward making sure we attract and retain top talent in the state workforce. The budget also fully-funds our required contributions to the Virginia Retirement System.
Agriculture & the Environment
The budget deposits $22.5 million into Virginia’s Water Quality Improvement Fund, consistent with our statutory obligation after the 2017 budget surplus. The Water Quality Improvement Fund assists local governments with reducing nutrient runoffs into Virginia waterways in an effort to improve the health of the Chesapeake Bay. Our budget also includes $18 million that goes directly to farmers across the state to help fund agriculture best management practices.
I am committed to reforming and increasing funding for Virginia’s mental health system. The House budget includes funding to fully fund same-day access at our Community Service Boards (CSBs). CSBs are a first stop for Virginians experiencing a mental health crisis needing help. The budget also includes funding for six new Crisis Intervention Team (CIT) centers.
Also included in the House budget was funding for over 800 new Family & Individual Support (FIS) waivers for Virginians with intellectual and developmental disabilities. This additional funding will help Virginians with disabilities get the medical care they desperately need.
The last portion of the budget I’d like to cover is healthcare reform, which deals primarily with Virginia’s Medicaid program. The plan included in the House budget is a conservative, responsible plan that includes no general fund tax increases and will utilize federal Medicaid funds to enroll low-income Virginians in private health insurance.
The plan included in the House budget is very similar to a plan adopted by Vice President Mike Pence during his time as Governor of Indiana. I have always been concerned about the unsustainable costs of the present Medicaid program, but I believe that these conservative reforms will help stabilize the program while allowing more Virginians to get healthcare coverage.
Under this plan, Virginia will work with the Trump administration to apply for federal funding while simultaneously pursuing key conservative reforms. This House plan includes a work requirement, which requires able-bodied Virginians to work, participate in workforce training, apply for jobs, or participate in community service. This requirement does not impact seniors, children, or the disabled. The plan also includes a “taxpayer safety switch” that will make sure if the federal government ever backs out of its commitment to pay for the costs, the plan will end. Lastly, this plan would place Virginians in private insurance markets rather than government-run exchange programs where they will be expected to pay co-pays and set up health savings accounts to better long-term plan for their well-being.
I know that this plan will help benefit hard working, low income Virginians who need help with health insurance. I view this plan as a hand up, not a government hand out. I believe these reforms are the right path forward for our Commonwealth.
I encourage you to keep in touch with me and my office during session. I value the feedback you provide on a continual basis as it helps me do a better job of representing you. You can email me at email@example.com or call me at (804) 698-1066. You can also join the conversation on our social media pages by liking my Facebook page or following me on Twitter.