Gov. Terry McAuliffe and Senate Majority Leader Thomas K. Norment Jr., R-James City, found common ground but few answers for local commissioners of revenue about lost raises for their employees and threats to local tax revenues.
McAuliffe and Norment, speaking separately to the Commissioners of Revenue Association of Virginia on Monday, bemoaned the loss of scheduled raises for their offices, as well as partial funding in the budget for a career development program the commissioners have made their top legislative priority.
The raises and career development stipends were part of a two-year, $346.3 million compensation package for state employees, teachers, and state-supported local employees that was canceled after the state fell short of revenue projections by $279 million in the fiscal year that ended June 30.
Norment, who is co-chairman of the Senate Finance Committee, told commissioners at the Hilton Richmond that he had asked the committee’s staff “to see if there is anything we can do to offer some token pay raise to say ‘We know you’re out there.’”
McAuliffe said he hopes the modest revival of revenues in the last two months will continue this month to reduce state budget cuts this year, but he twice warned of the looming danger of a new round of federal budget cuts next year that could inflict another blow on Virginia’s military-dependent economy.
A two-year federal budget deal reached last fall is scheduled to expire in a year, opening the door to another round of automatic spending cuts under sequestration, which dealt a severe economic blow to military-dependent regions such as Northern Virginia and Hampton Roads in 2013.
“I hope the new president and the new Congress will get their act together before the next one because if they don’t that one will be much worse,” the governor said.
McAuliffe and Norment also decried Congress’ lack of action to pass the Marketplace Fairness Act, which state and local officials say is essential to require taxation of internet sales that now have an unfair advantage over sales from traditional retail businesses.
“Something really needs to be done,” Norment said.
McAuliffe agreed that passage of the law would generate more tax revenue for the state and its transportation trust fund, but he said General Assembly Republicans have stood in the way of an even bigger boost to state coffers by refusing to accept billions of dollars in federal funding to expand Medicaid.
Virginia has forfeited an estimated $7.9 billion the past three calendar years from federal taxes paid by residents and businesses under the Affordable Care Act. In the future, the state would have to pay a small match — growing to 10 percent by 2022 — to draw down more than $2 billion a year in federal funds to provide health insurance to hundreds of thousands of uninsured Virginians.
McAuliffe estimates that by expanding the Medicaid program next July 1, the state would save $211 million a year that it spends now on indigent care that hospitals provide to the uninsured, hospital care for prison inmates, and local services to people with mental illness and other behavioral health issues.
“I’m just laying it out — it’s your money and we have forfeited it,” he said.
Earlier, Norment had played down political differences between Republican legislative leaders and the governor, despite high-profile battles over Medicaid, restoration of voting rights to felons, and appointment of a justice to the Supreme Court of Virginia.
“The chasm between the administration of Governor McAuliffe and the legislature is nowhere as broad or deep as you would be led to believe,” the majority leader said.