Virginia is having to take a careful look at its budget this year, as tax collections were lower than expected. The budgeting process was kicked off last week, when Governor Terry McAuliffe outlined his proposals to lawmakers.
When Terry McAuliffe was introduced to members of the Virginia House and Senate Appropriations and Finance Committees he won nearly three minutes of applause. But time will tell how popular his proposed budget really is.
The Governor said he expects revenues to be down in Virginia because of federal cuts to defense spending and lower payroll tax revenues.
Even still, he offered a 1.5-percent bonus to state employees.
"I've included another 55.5 million for the state share of a 1.5-percent bonus for public school teachers, with no requirement for a local match," said McAuliffe during his presentation to lawmakers.
Many agencies will face budget cuts and state universities will get 5-percent less money in 2018. Those who were spared include state police, prisons, juvenile justice, mental health and public schools.
Noting that the Affordable Care Act may be repealed, McAuliffe said his budget did not count on any federal dollars from the expansion of Medicaid.
"Some have argued that the ACA will be repealed outright and that 20 million people will lose their coverage overnight," McAuliffe said. "I maintain that when the partisan rhetoric subsides we will still have some form of enhanced Medicaid coverage, even if it's wrapped in a new package."
If that happens McAuliffe is asking lawmakers to let him expand the program. But Republican State Senator Tommy Norment scoffed at the idea.
"I think the House Appropriations and the Senate Finance Committee are going to work more collaboratively than perhaps we have historically done so, accepting those positive proposals that he's made and perhaps not embracing some of them that we're not so enthusiastic about, especially the Medicaid expansion. He just can't seem to get over it." Norment said to reporters following the Governor's speech.
McAuliffe reminded lawmakers that the state has lost nearly eight billion dollars in federal aid because it refuses to expand Medicaid.
To raise additional revenue the Governor proposed a tax amnesty for qualifying businesses, waiving penalties and cutting interest in half for those who owe money.
He also suggests a sales tax on internet merchants with warehouses or fulfillment centers in Virginia.
Now his proposals go to lawmakers, who kick off their legislative session in early January.
