On Sunday, the House budget proposal was presented to the delegation. I believe it is a responsible, conservative proposal that saves first and spends second. It is a structurally balanced budget that invests in the core functions of government and numerous key priorities.
Similar to the actions you must take in running your personal household, I recognize that tough choices must be made to ensure that Virginia remains fiscally sound and continues to be a great place to live, work and raise a family. That’s why we have taken a “savings first” approach to crafting the budget, setting aside over $380 million in two state savings accounts. And like Virginia families, we recognize that we have to set priorities. Our obligation is to the core functions of government – education, public safety, transportation and healthcare. Our budget puts an emphasis on investments in K-12 and higher education, mental health services, hospitals and healthcare, and state employees.
Savings first- Virginia’s economic recovery has been stronger than most states, but still not strong enough. We have included a $243 million Rainy Day Fund deposit that brings the fund to over $900 million. We have also set aside nearly $140 million for a revenue reserve fund to offset any potential economic slowdown. This revenue reserve will be used to absorb any future revenue reductions.
Investing in Key Priorities- Our budget recognizes the need to invest in the core functions of government which are K-12 and higher education, supporting the health care safety net, rewarding our hard-working state employees and investments in mental health services. If Virginia meets its revenue forecasts, the revenue reserve fund will be used to provide some state employees with pay raises and bonuses, and to fully fund the state’s pension system. The House budget includes $81 million in total funds to restore the Medicaid inflation adjustment for hospitals, and the $111 million inflation adjustment for Virginia nursing homes. Caring for Virginia’s most vulnerable citizens has always been a House priority. That’s why we have included an additional 50 ID and 15 DD waivers. We also provide $48 million for mental health access, treatment and services. The House budget includes an additional $530.9 million for public education. This strong investment, when combined with numerous reforms over the last several years to ensure that money is spent in the classroom, will help provide teachers with the tools and resources they need to provide our children with a high quality education. The budget commits over $210 million to higher education, including $20 million to help keep tuition affordable and $6 million for more in-state slots at William & Mary, UVA, Virginia Tech and JMU.
Health Care Safety Net & Hospitals - Federal health care cuts due to the Affordable Care Act, sequestration and other federal actions are negatively hurting our hospitals. Unfortunately, Virginia’s options are limited; however, we can ensure that the state continues to support our hospitals for the indigent care services they provide. In response to the federal cuts, the House proposal includes over $118 million in inflation adjustments for our hospitals and $111 million for our nursing homes.
Health Care Safety Net & Mental Health - This year, we have taken a number of steps both legislatively and in the budget, to address critical weaknesses in our Mental Health System. The House budget includes $48 million for mental health treatment, intervention and access services. This funding will help create 17 additional crisis drop-off centers across the state, create three new PAC teams and ensure that a bed of last resort is always available for someone who needs mental health care. The House budget also includes 50 additional ID and 15 DD waivers slots, bringing the total number of slots provided to 750 and 65, respectively. The House budget also includes a 50 percent increase in funding for Virginia’s free clinics and community health centers, bringing the total to $6 million.
K-12 Education- This year, the House budget includes nearly $531 million in new funding for our students, teachers and school systems. This investment, as well as the numerous reforms over the last several years to ensure that money is spent in the classroom, demonstrates our long-term commitment to public education in the Commonwealth. The budget includes $5.4 million new money for “cost to compete” in eligible school divisions. It also includes over $7.5 million for math and reading initiatives, Teach for America and board certification bonuses for teachers.
Higher Education- The House budget commits over $210 million for higher education, including funding for more in-state tuition slots, funding to help moderate tuition costs and more funding for research. Building on our landmark higher education package from several years ago, this budget includes $6 million in new funding to complete the phase-in of more than 1,700 additional in-state slots at William & Mary, Virginia Tech, James Madison and the University of Virginia. Virginians saw average tuition increases of 4% and 4.7% in the last two years – some of the lowest increases in the last decade – due to our continued commitment to higher education. This year, we are continuing that commitment with $20 million in new funding to help keep college affordable for Virginia families.
Once the House and Senate pass their respective budgets, the conferees will iron out the differences between the two and send it on to the Governor for his review. Therefore, the budget is subject to numerous changes as the process unfolds.
I certainly hope that this overview is helpful to you. If you have any comments or concerns, please do not hesitate to contact me.
James "Jay" Leftwich, Jr.