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 Democrat Terry McAuliffe will occupy Virginia's executive office
when the statehouse begins debating the budget in January. Because
of state law, though, legislators will work off the proposal drafted
by McDonnell, a Republican whose term ends this year.
"This is not the point where an outgoing governor would usually
embark on major new programs, but rather a time to solidify past
policy initiatives. My budget makes room for both," McDonnell said
in remarks to state legislators.
Virginia's revenue will likely grow 4.2 percent in the fiscal year
beginning July 1 and 3.9 percent in the following year, he said.
That will allow spending to increase by about $10 billion from the
last biennial budget.
In the plan, McDonnell left $50.9 million free to give
Governor-elect McAuliffe spending flexibility. He said it was the
state's largest unappropriated balance since 1991.
A spokesman from McAuliffe's office did not respond to requests for
comment on the budget. In a statement released to local media,
however, the spokesman said that it includes many items "that will
make Virginia a better place to work, live and do business," and
that McAuliffe is "already closely examining" it.
The budget forecasts capital spending and debt to rise slightly over
the two years. Total outstanding debt is expected to reach $11.86
billion in fiscal 2016, compared with the $10.8 billion outstanding
this fiscal year. Spending is expected to increase to $48.59 billion
from $44.62 billion. The budget also puts $196.7 million aside for
debt service.
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"I believe we need to take a breather from issuing significant new
debt until we have a better understanding of Virginia's future
economy," McDonnell said.
Medicaid, the health insurance program for the poor that is
partially reimbursed by the federal government, now makes up more
than a fifth of Virginia's spending and is "the fastest growing
major program in our operating budget," McDonnell said.
Over the biennium, Virginia will have to spend $674 million more
despite slower enrollment growth, McDonnell said, adding that the
budget also does not include an inflation increase for hospitals
participating in Medicaid in fiscal 2015.
"While the Medicaid forecast does include some funding for an
anticipated increased enrollment from the federal exchange, we have
seen little impact due to the major exchange implementation issues,"
he said.
(Reporting by Lisa Lambert; editing by Matthew Lewis)
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