In a busy first day in the General Assembly’s special session, Governor McAuliffe introduced a new budget, only to have it rejected hours later by the House of Delegates. The Senate adjourned for two weeks. The centerpiece of McAuliffe’s budget is a two-year trial expansion of the state’s Medicaid program. McAuliffe presented a letter from the Centers for Medicare and Medicaid Services granting federal permission for a two-year pilot program with no penalty for cancellation. McAuliffe says Medicaid expansion will produce $225 million in annual savings to the state’s General Fund and will fund a 2 percent raise for state employees and state supported local employees, including school teachers and support personnel, college and university faculty and other constitutional officers. The Governor included $17 million in 2016 to fund the state’s portion of the Line of Duty Act. The program was previously state supported, but over the past few years the General Assembly has shifted costs to the local level. McAuliffe fully funds the VRS by investing $76.3 million to increase the employer retirement contribution rates to 100 percent of the VRS board certified rates. (These funds may also be used to offset any downward revisions in revenue estimates over the 2015 and 2016 fiscal years.) The Governor added $100 million to the Virginia Health Reform and Innovation Fund, which will cover the future state costs of expanded coverage once the Federal Government decreases its support from 100 to 90 percent. The budget also includes $8.9 million in additional revenue for mental health services, $7.4 million for Pre-K and $7.1 million for land conservation. McAuliffe says if his plan is accepted Virginia could begin accepting new Medicaid patients into the system by October 1st. Republican Delegate Scott Garrett of Lynchburg, believes Governor McAuliffe and the Senate have held the budget hostage in order to expand Medicaid. He says a similar Medicaid expansion pilot was unsuccessful in improving the quality of care in Oregon.
The House Appropriations Committee voted to reject Governor McAuliffe’s budget just hours after its introduction. Shortly thereafter the Senate moved to adjourn until April 7th. The Senate finance committee will hold a public hearing on the budget April 2nd. The House will return tonight (March 25) at 7:30 to pass its own version of the budget. Both houses have passed the "caboose" budget bill, which will adjust the current budget to reflect revenue re-forecasts and fund the government through June 30.