State employees and school teachers will have to wait. So will university presidents, sheriff’s deputies, correctional officers and advocates for economic development.
Virginia won’t have a new state budget anytime soon.
A breakdown in budget talks between the House of Delegates and Senate on Thursday ensures that the General Assembly won’t complete its most important job in time for its scheduled adjournment on Saturday.
Instead, the legislature is likely to seek a special session to settle a budget battle that pivots on whether to accept billions of dollars in federal money to expand Medicaid coverage for more than 300,000 uninsured Virginians.
The wait is likely to be especially tense for school teachers, who are hoping for assurance of a 2 percent pay increase, and school districts faced with their own deadlines for adopting budgets for K-12 education.
“We urge legislators to break the impasse, as our school divisions are just now in the midst of planning their budgets and deserve sound financial footing,” said Jim Livingston, president of the Virginia Education Association.
The budget the House adopted is awash with money for public education, fueled by $371 million in estimated state savings from using enhanced federal Medicaid money for an array of services, such as indigent care at hospitals, local mental health services, and health care for prison inmates.
“Expanding Medicaid and investing savings in our public schools is good for those needing additional health coverage, and it is good for the health of our public schools,” said Livingston, who estimates that the House budget includes $169 million more for K-12 school districts than the Senate, including assured, rather than conditional, raises in the second year.
But those savings depend largely on a proposed tax on hospital services that would generate about $307 million over two years to pay Virginia’s share of the costs of expanding its Medicaid program on Jan. 1, as the House proposes and the Senate opposes.
It’s a trade-off that Senate Republicans aren’t willing to accept.
Senate Republican Caucus Chairman Ryan McDougle, R-Hanover, called the Senate budget “one of the most conservative, reasonable, well-deliberated budgets that this body has produced.”
However, McDougle was not able to persuade Senate Democrats to agree to either of two proposed resolutions to extend the 60-day session by 30 days, or by three, to next Tuesday.
Senate Majority Leader Tommy Norment, R-James City, already had made clear that the 13-member House-Senate budget conference committee had stopped meeting and had abandoned hopes of reaching agreement by its scheduled adjournment on Saturday.
“We’re looking at whether we need to extend the session, or go into special session,” Norment said in an interview after a meeting of the Senate Republican Caucus on Thursday morning. “The dialogue is continuing.”
Needing approval by two-thirds of the chamber’s 40 members, the first two resolutions failed on 21-19 party-line votes. Norment then urged Democrats to support a third proposed resolution to ask the governor to convene a special session as early as Friday to act on the budget and elect judges, which likely won’t happen until after the adjournment of the current session.
“There is nothing nefarious going on,” he said.
After a lengthy recess, McDougle said the Senate would wait until Friday to act on the resolution for a special session.
The House watched in silence as the Senate debated a course forward, but Appropriations Chairman Chris Jones, R-Suffolk, said a special session would make more sense than extending the current session.
“I think it’s always helpful when you go back home and hear from constituents,” Jones told reporters.
Earlier, when asked about Norment’s comments, the Appropriations Committee chairman confirmed the breakdown in budget talks.
“While we made much progress, we’re not in a position to get the budget done by Saturday,” he said.
Two House leaders — both opponents of Medicaid expansion — got a personal taste of the Senate’s deepening frustration with the House when they were invited into the Senate Republican Caucus on Thursday.
Appropriations Vice Chairman Steven Landes, R-Augusta, said that he and House Finance Chairman Lee Ware, R-Powhatan, were looking for several senators when they were invited into the caucus meeting.
“They went off on all sorts of tangents,” Landes said.
The two House Republicans — who both voted against their chamber’s budget because of Medicaid expansion — said they were looking for more information about the Senate’s position for members of their own caucus.
Ware said he “came away with a fortified sense” of the Senate majority’s position.
“The Senate is the reverse of fractious — they are unified,” he said.
Gov. Ralph Northam discussed the budget breakdown with Jones and House Speaker Kirk Cox, R-Colonial Heights, earlier Thursday, said spokesman Brian Coy, who declined to comment on those discussions or the governor’s position on how to proceed.
“The governor has been very clear that he prefers a budget that includes (Medicaid) coverage expansion as soon as possible,” Coy said.
Jones dismissed questions about a potential state government shutdown as premature, with the current budget in effect until June 30 and new two-year cycle beginning July 1.
“We have to have a budget by July 1,” he said. “We’ll have a budget.”
This would be the first time the assembly has adjourned without a budget or convened in special session since 2014, when the House and Senate deadlocked on the proposed expansion of Medicaid during the first year of Gov. Terry McAuliffe’s term.
Then, the Senate had proposed Marketplace Virginia as a private insurance approach to using federal dollars under the Affordable Care Act to expand Medicaid coverage for hundreds of thousands of uninsured Virginians. The House strongly opposed expansion, ultimately defeating the proposal the first of four times during McAuliffe’s term before voters last fall slashed Republicans’ two-thirds majority to two seats.
Earlier on Thursday, Jones asked the House to not act on Senate Bill 915, proposed by Sen. Siobhan Dunnavant, R-Henrico, as a limited alternative to full expansion of Medicaid under the Affordable Care Act, but without money in the Senate budget to pay for it.
The budget chairman had sent the legislation to the House floor without a Senate amendment to link enactment to funding in the budget. He had planned to amend it with a substitute bill to carry out Medicaid expansion, as proposed in the House budget, as a way to allow Senate Republicans to vote on the issue outside of the budget.
Instead, Jones asked the House to take no action on the bill Thursday, leaving it to die as the assembly faced an approaching deadline to act on all pending bills by the end of Thursday night.
Now, the long wait begins for a budget, both for changes in the spending plan for the fiscal year that ends on June 30 and the spending plan for the biennium that begins July 1.
“I’m optimistic that they’ll find a solution,” said John O. “Dubby” Wynne, a Hampton Roads business leader and chairman of GO Virginia, which would receive an additional $15 million under the House budget for the fledgling economic development initiative.