Higher than expected revenues mean lawmakers are proposing raises for state employees and spending tens of millions more to lure businesses to Virginia.
The adjustments and other changes to the second year of the two-year state budget were outlined Sunday during House and Senate money committees hearings.
The proposals would add millions to the state’s rainy day fund and give Gov. Terry McAuliffe more money for economic development. But Republican legislators rejected some of the Democratic governor’s other requests.
“Our recommendations adhere to our commitment to conservative budgeting,” said Del. Chris Jones, R-Suffolk, chairman of the House Appropriations Committee.
Last year, McAuliffe and lawmakers had agreed to cuts, layoffs and drawing down the state’s rainy day fund to close a projected shortfall of about $2.4 billion in the two-year, $36.8 billion general fund budget. The second year of the 2014-16 budget begins July 1.
Lawmakers are expected to debate their budget amendments this week and each chamber will vote on their respective budgets Thursday. Negotiators will merge the House and Senate budgets into a compromise for approval by the General Assembly later this month.
The state’s rainy day fund contained about $1 billion in the fall and is presently at about $240 million, said Robert Vaughn, staff director of the House Appropriations Committee. The House budget plan would add about $100 million, while the Senate’s calls for $134 million.
The House plan also calls for 1.5 percent raises for state employees and troopers, a 2 percent raise for state-supported local employees and provides money for a teacher raise of 1.5 percent.
The Senate’s version includes a 3 percent raise for state employees and state-supported local employees, as well as 1.5 percent for teachers.
McAuliffe submitted budget amendments in December that included a raise for sheriff’s deputies, but not state employees. But he asked lawmakers to look for ways to give state employees a raise.
Legislative leaders indicated they support adding more money to the Governor’s Opportunity Fund, but not as much as McAuliffe requested. The fund provides grants to entice companies to locate or expand in Virginia. McAuliffe has committed all the money allocated last year and was seeking about $28 million more.
The House is proposing about $20 million.
“He’s getting a very, very large increase compared to what we’ve done in the past,” Jones said.
A number of amendments directly affect Hampton Roads.
The budget plan calls for a study of state funding for the Midtown Tunnel expansion project to determine whether the tolls at the Downtown and Midtown tunnels could be lowered or eliminated, said Sen. Frank Wagner, R-Virginia Beach, who is chairman of the transportation subcommittee of the Senate Finance Committee.
The Senate proposal also calls for a study of the potential for light rail on the Peninsula, Wagner said.
Lawmakers also are planning to budget money for a long-term nursing care facility in Hampton Roads for veterans, although the facility also would need federal funding.
Both the House and Senate rejected McAuliffe’s proposal to issue bonds to pay for $28 million in new voting equipment. Equipment problems plagued Virginia Beach in the November election.
Both budgets include McAuliffe’s request for money to assist Jefferson Lab in Newport News as it tries to convince the U.S. Department of Energy to make a $1 billion investment there for an electron ion collider. The House budget calls for $4.2 million for Jefferson Lab, while the Senate amount is slightly less.
Lawmakers, who cut millions from higher education last year, want to add more money for colleges and universities. House Republicans propose $100 million for capital construction and a 2 percent faculty raise. Their plan also restores about $20 million – funds cut last year – intended to make college more affordable with programs aimed at increasing graduation rates and enrollment spots.
McAuliffe and Republicans want to spend more on mental health, but they don’t agree on how to do it.
McAuliffe announced a program in September called “Healthy Virginia” to provide health care to the mentally ill and help people without health insurance enroll in programs.
The Senate budget backs McAuliffe, but House Republicans have expressed concerns about the program and propose more than $124 million for what they call safety net services, including $6 million for free health clinics.
When it comes to Medicaid expansion under federal Affordable Care Act, the governor is rejected for the second year in a row. He has chastised Republicans for not accepting hundreds of millions in federal dollars that could help close shortfalls and insure as many as 400,000 people.
Republicans continue to oppose the expansion.
By Patrick Wilson