Two Year Budget Proposal

Dec 17, 2013

Governor McDonnell has rolled out his final two-year state budget, which includes additional funds for major core services and other priorities.

The $95.9 billion budget also injects new cash into the Rainy Day Fund and adds millions of dollars to public and higher education. 

The Governor says he used caution in forecasting revenues—due to the disproportionate impact on the state of potential changes in federal fiscal policies.

McDonnell said he wants to ensure structural balance with no hidden obligations since a new governor will soon take office. A top priority is public education.

“We include more than $500 million for local school divisions to support the re-benchmarking of the Standards of Quality—accounting for the growth in student enrollment and the increased teacher retirement costs.”

He added funds for remedial specialists, school construction, pre-K, mental health, state worker bonuses, and water improvement. Another priority is $183-million in new funds for college enrollment growth, financial aid, and other goals. The Governor also added $674-million for Medicaid.  He said since the program now consumes one-fifth of the General Fund, it needs structural reforms before it’s expanded.  He proposed a deadline.

“It sunsets any potential Medicaid expansion on June 30, 2016.  That’s the year the 100% federal match runs out.  But that’s also an opportunity to require a full evaluation of whether Medicaid reform efforts are working and whether Virginia can afford the expansion.”

The spending plan will undergo changes before lawmakers pass a final budget.

Medicaid may be one bone of contention with Governor-elect Terry McAuliffe, who has said he definitely wants to expand the program.