State assembly approves nearly $35B budget

2/27/2015 –

The General Assembly adopted a nearly $35 billion state budget in record time on Thursday, two days before its scheduled adjournment and just eight months after an ugly standoff between the House of Delegates and Senate over the two-year spending plan.

Ironically, the catalyst for the turnaround may have been the collapse of state revenues last spring, triggering the end of a three-month standoff over expanding Medicaid through the budget and forcing a revenue reforecast that resulted in a $2.4 billion shortfall in August.

“That presented a unique opportunity for the House, Senate and governor to work together,” said House Appropriations Chairman S. Chris Jones, R-Suffolk, who credited “a profound level of cooperation and communication” in dealing with the shortfall and reaching a budget agreement.

The House voted 95-5 and the Senate 38-1 to approve the budget deal reached by negotiators last weekend and presented to legislators more than 48 hours before the vote. Sen. Thomas A. Garrett Jr., R-Buckingham, cast the no vote.

“If we are in as dire an economic time as we keep hearing, then we shouldn’t be spending on luxury items,” said Garrett, who objected to a $1.5 million appropriation to purchase “yurts” as shelters in state parks.

The $35 billion reflects general fund dollars, the state taxpayer money that largely is allocated to education, health and public safety. The budget’s passage was smoothed by the recovery of tax revenues, allowing the assembly to give raises in an election year to state employees, state-supported local employees, higher education faculty, and teachers. Still, the budget represented a decrease of more than $1 billion from the spending plan adopted in June.

The $153.5 million employee compensation package emerged as the centerpiece of a budget that also boosted contributions to state employee and teacher pensions, restored $30 million in state aid to local governments, and strengthened the health care safety net, especially for people with serious mental illness.

“This budget does not go far enough, but it may go as far as we can get right now,” said House Minority Leader David J. Toscano, D-Charlottesville.

Toscano urged Democrats to support the agreement despite their disappointment over the absence of Medicaid expansion and education spending that lags behind pre-recession levels.

In the end, four Democrats and Del. Joseph Morrissey, I-Henrico, voted against the budget, but Democratic Gov. Terry McAuliffe hailed the budget’s passage.

“Virginians should be proud of the manner in which their leaders worked together across branches of government and party lines to pass a balanced budget that invests in key priorities for a new Virginia economy,” McAuliffe said in a statement.

McAuliffe thanked Jones and the chairmen of the Senate Finance Committee, Sens. Walter A. Stosch, R-Henrico, and Charles J. Colgan, D-Prince William, for “their partnership throughout a budget process that has been marked by bipartisan leadership and cooperation.”

The budget includes a number of McAuliffe’s top priorities, such as $27 million for his economic deal-closing fund.

“The governor, as you all know, is a salesman, and he does a very good job at it,” Jones quipped.

House Speaker William J. Howell, R-Stafford, credited the efforts made in September to close most of the projected revenue shortfall with budget legislation the assembly adopted in a special session with McAuliffe’s support.

The budget was the last for Stosch, who will retire at the end of this year after 33 years in the legislature, including 23 years the Senate. “Walter Stosch has been very kind to me in my two years as chairman,” Jones told the House.

The budget got a big lift from more than $250 million in unclaimed stocks the administration sold and used to finance a big contribution to the teacher pension fund that will save state and local governments in contributions to teacher retirement. The administration is looking for a similar windfall from unclaimed U.S. savings bonds that it proposes to take possession of, while ensuring that bondholders would not relinquish their claims.

The House Commerce and Labor Committee voted 13-8 Thursday to approve Senate Bill 1465, introduced by the governor late in the session and carried by Sen. John Watkins, R-Powhatan, to allow the state to take possession of the unclaimed bonds.

By MICHAEL MARTZ Richmond Times-Dispatch