The Budget Impasse Ends

June 1, 2018

After lengthy floor discussion, the Senate passed FY 2018 “caboose” and 2018-2020 biennium budgets in the early evening of May 30. The House subsequently voted to accept the Senate’s amendments, which eliminated the need for a conference committee. The budget bills are now before the Governor, who indicated in a statement that he would be acting promptly to review them for any necessary technical fixes. With the major sticking point between the two chambers – Medicaid expansion under the Affordable Care Act – settled, and the end of the fiscal year approaching, final resolution of the budget process is expected to be swift.

The budgets approved this week contain authorization for the expansion of Medicaid eligibility to individuals with incomes up to 138 percent of the Federal Poverty Level and direction for the state to apply for a demonstration waiver from the federal government to implement the Training, Education, Employment and Opportunity Program (TEEOP), which would require able-bodied adult Medicaid enrollees of working age to participate in certain employment, training, education, or other community engagement activities. By accepting the additional federal funds associated with Medicaid expansion, the biennium budget “frees up” state funds that currently support services such as inmate health care, allowing additional resources to be available for a variety of local government priorities, such as K-12 education.

Below is a preliminary overview of key elements of the budgets approved this week. VACo will provide a more detailed analysis in the near future.

  • Provides $131.4 million for the state’s share of a three percent salary increase for SOQ-recognized instructional and support positions, effective July 1, 2019, contingent on revenue projections for FY 2019 and FY 2020 remaining consistent with revenues assumed in the 2018 Appropriations Act when the 2019 budget is developed.
  • Provides funding for a two percent salary increase for state-supported local employees, effective July 1, 2019, also contingent on stable revenue projections.
  • Provides funding to support the cost of increasing the entry-level pay for sworn deputy sheriffs (grades 7 and 8) by $871, effective February 1, 2019, also contingent on stable revenue projections.
  • Includes an increase in the Supplemental Lottery Per Pupil Amount of $43.4 million in FY 2019 and $48.1 million in FY 2020 (funds represent a combination of additional lottery revenue, additional General Funds, and funding redirected from several proposals in the introduced budget, including “no loss” funding for schools that would otherwise lose state funding in FY 2019 relative to FY 2018 and funds to provide a full-time principal in each elementary school).
  • Provides additional funding for the Virginia Preschool Initiative (VPI) for the following:
    – Increasing the per-pupil amount from $6,125 to $6,326
    – Assisting school divisions with incentives for provisionally-licensed preschool teachers to obtain full licensure (priority for awarding grants is to be given to hard-to-staff schools and schools with the highest number of provisionally licensed VPI teachers)
    – Professional development and training for VPI classroom teachers
    – Conducting classroom observations and developing assessments to determine the quality of all VPI classrooms
  • Provides an additional $2 million GF each year (for a total of $4 million per year) to the Virginia Telecommunication Initiative to support the extension of broadband networks by the private sector in unserved areas; language directs the Department of Housing and Community Development to develop appropriate criteria and guidelines for the use of the funding provided to the Virginia Telecommunication Initiative.
  • Increases funding for GO Virginia by $5 million in FY 2019 and $10 million in FY 2020, for a total of $29.5 million in FY 2019 and $34.5 million in FY 2020; increases eligible minimum grant amounts and directs the Virginia Growth and Opportunity Board to develop a framework and guidelines to facilitate broadband assessments, planning and projects.
  • Includes language and funding for the Compensation Board, the Department of Medical Assistance Services, the Department of Corrections, and the Department of Juvenile Justice to implement recommendations of a workgroup convened in 2017 at the direction of the General Assembly to streamline the process of enrolling inmates in Medicaid. VACo worked with a coalition of stakeholders to advocate for these improvements, which will assist in allowing Medicaid to cover inpatient care for eligible inmates in local and regional jails.
  • Retains the proposal in the introduced budget for a study of rates paid to special education private day programs through the Children’s Services Act, to include recommendations for implementing a rate-setting structure. Language imposes a two percent cap on growth in rates paid by localities to providers of private day special education services, effective July 1, 2019 (rates paid in FY 2020 would not be able to increase more than two percent over the rates paid in FY 2019). Language directs the creation of a workgroup to identify and define outcome measures to assess students’ progress in private day placements.
  • Retains $5.9 million in each year in the introduced budget to complete the phase-in of same-day access to mental health screenings at Community Services Boards (CSBs), and $3.7 million in FY 2019 and $7.4 million in FY 2020 to fund primary care screening at CSBs, as required by the STEP-VA plan adopted by the 2017 General Assembly. Provides an additional $15 million in FY 2020 to begin phasing in an expansion of outpatient mental health and substance abuse services and $2 million in FY 2020 to begin phasing in an expansion of detoxification services, also as required by the STEP-VA plan.
  • Provides $20 million for the Stormwater Local Assistance Fund in FY 2019.
  • Retains proposed increases to HB 599 funding for localities with police departments included in the introduced budget ($6.6 million in FY 2019 and $13.8 million in FY 2020).
  • Directs the Executive Secretary of the Compensation Board to convene a working group to investigate the effects of body-worn camera use by law enforcement on the workloads of Commonwealth’s Attorneys’ offices.
  • Appears to divert $2 million per year in expected savings from the telecommunications relay contract that is funded from the Communications Sales and Use Tax Trust Fund to the state General Fund. VACo is requesting that the Governor eliminate this provision.

VACo Contact: Katie Boyle

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