Category Archives: Budgets

Lab School Process Underway; Youngkin Oblivious to Overfunding

Stephen Cummings, Va. Secretary of Finance

by Dick Hall-Sizemore

Governor Youngkin’s Lab School initiative is off to a fairly good start, although it is probably not progressing as quickly as he thought or hoped it would.

According to the Department of Education (DOE), the department has received two applications for the establishment of a lab school— from James Madison University and Southside Community College. In addition, it has received applications from 12 institutions for planning grants for lab schools.  They are:

  • University of Mary Washington
  • Mountain Gateway Community College
  • Old Dominion University
  • George Mason University
  • Virginia Commonwealth University
  • University of Lynchburg
  • Eastern Shore Community College
  • New College Institute
  • University of Virginia
  • Germanna Community College
  • Emory and Henry College
  • Virginia State University

Continue reading

School Choice for Poor Still Hard Sell to Democrats

By Chris Braunlich

On being told that peasants were starving for lack of bread, Marie Antoinette is reputed to have said “Let them eat cake.”

Marie Antoinette had nothing on Delegate Suhas Subramanyam.

At a House subcommittee meeting on Wednesday, Delegate Subramanyam was confronted with more than a dozen low-income families and Black community leaders demanding educational choices and opportunities for their children. Continue reading

Right Help, Right Now

Gov. Youngkin announces his mental health budget proposals. Photo credit: Richmond Times-Dispatch

by Dick Hall-Sizemore

Probably the most important set of budget proposals made by Governor Youngkin for the upcoming General Assembly has been in the area of mental health. It has already been discussed generally on this blog. (See here and here.)  It might be helpful to examine the details of the proposal.

The Governor, and others, have called his proposals “transformational.” That borders on the hyperbolic, but every governor engages in hyperbole in describing his proposals. His proposal actually accelerates a transformation begun several years ago, while placing additional emphasis on one aspect of government’s reaction to mental health needs—crisis management. Therefore, his description of his proposal as moving “from slow evolution to accelerated revolution” is entirely appropriate.

There is another aspect of the Governor’s proposal that is unusual and admirable—a three-year plan. Most Virginia governors wait until their second year in office and their first biennial budget bill before advancing any major initiatives. As a result, they actually have only a year and a half to implement it before leaving office. In contrast, Youngkin has proposed funding for the second year of the current biennium, to be followed up with additional funding in the 2024-2026 biennial budget bill. Therefore, his administration will be in a position to get the major components of his proposal well established during his term. Continue reading

Governor’s Plan to Bolster Law Enforcement Is Meek Rather Than Bold

by Dick Hall-Sizemore

In October, amidst much fanfare, Governor Youngkin announced Operation Bold Blue Line.  In the words of the Governor’s press release, this initiative is “a series of concrete actions to reduce homicides, shootings, and violent crime.”

I had some questions and wanted some details on the proposal.  I posed these questions to the Governor’s press office.  Crickets.  I then posed them to the office of the Secretary of Public Safety and Homeland Security.  I got an acknowledgement and a pledge to provide the information I had requested.  Time marched on and no answers, just requests for more time to prepare the response.  Finally, I was told that my inquiry was being bumped to the Governor’s press office.  Fortunately, someone in that office did respond and answer my questions.

After doing some research and reading the responses to my questions, I have to say that I am underwhelmed by this initiative. Continue reading

Democrats Want to Raise Youngkin-Proposed Mental Health Budget Increase

Health Resources and Services Administration Mental Health Care Health Professional Shortage Areas, by State, as of September 30, 2022, data.HRSA.go.                 Courtesy Governor Youngkin

by James C. Sherlock

There is fundamental agreement in Richmond over mental health services.

From the Richmond Times-Dispatch:

Virginia’s forecasts of long-term budget surpluses mean this year’s General Assembly has a chance to catch up with years of under-funding Virginia schools and the state’s behavioral health system, General Assembly Democrats say.

To govern is to choose. “Democrats” may wish they had used different words than “years of underfunding,” considering who had control in Richmond in 2020 and 2021.

But it is actually helpful that they now think even the governor’s proposal for a 20% increase in the mental health budget approved last year is not enough. If (a big if) more money can be spent efficiently and effectively.

The governor has proposed a $230 million increase in behavioral health program spending over what was approved last year.

So, as the old saying goes, they are just discussing price.

Let’s look at the behavioral health situation to see why. Continue reading

Preparing for the Costs to Government of Virginia’s Generation COVID

John Littel, Virginia Secretary of Health and Human Resources

by James C. Sherlock

To justify her insistence on keeping schools closed, Randi Weingarten, the president of the American Federation of Teachers, said in February of 2021, “kids are resilient and kids will recover.”

She brought that same message to Virginia.

In one of the strangest choices in Virginia political history, Terry McAuliffe brought Weingarten to Virginia to campaign with him on the last weekend of his losing gubernatorial campaign.

Thus sealing his defeat.

It turns out, as it was always going to, that you can’t keep kids out of school for up to a year and a quarter, homebound, and expect all of them to “recover.”

I will call here those in K-12 during COVID school shutdowns Generation COVID (Gen C).

I wrote the other day of an estimate by a renowned educational economist that the 1.2 million Gen C kids in Virginia public schools would lose several hundred billion dollars in lifetime earnings because of un-repaired damages to their learning of all types.

His critics here argued into the night about study methodology, but none denied costs at some level would be there. They did not offer their own estimates.

John Littel, Virginia’s Secretary of Health and Human Resources, has the job of preparing his agencies for the lifetime social costs of those children. Continue reading

A Conservative Fiscal Proposal

by Dick Hall-Sizemore

Governor Youngkin has proposed tax reductions that would reduce state revenue by about $1 billion in this biennium.

I have an alternative proposal on how to use that billion dollars, one that should appeal to the instincts of conservatives on this blog—reduce the Commonwealth’s outstanding debt balance.

The Debt Capacity Advisory Committee has reported that, as of June 30, 2022, the Commonwealth had a balance of $4.0 billion in authorized but unissued tax-supported debt. Using the $1 billion in general fund revenue that Youngkin proposes to forego in the form of tax reductions to supplant bond authorizations for capital projects instead would save the Commonwealth a significant amount in interest payments over the course of the term for which those bonds are now authorized. I do not have all the data needed to project the savings, but it could easily be several hundred million dollars over the course of 20 years.

Financial advisors often urge individuals to pay down debt balances whenever possible. It seems that would be a prudent move for the state as well.

New Youngkin Tax Cuts Total $7 Billion By 2028

Governor Youngkin’s major tax proposals and how much they save taxpayers. Source: Secretary of Finance. Click for larger view.

by Steve Haner

The set of Virginia tax changes Governor Glenn Youngkin (R) has baked into his proposed 2023 budget amendments is far more extensive and involves substantially more tax relief than the descriptions he offered in his December 15 presentation. Continue reading

Reparations for the Violators

by Dick Hall-Sizemore

Governor Youngkin has proposed reparations for people who violated legal orders.

Included in his budget proposal is a directive to reimburse all fines, fees, and interest imposed on individuals “due to violations of COVID-19 related practices, guidelines, rules or operating procedures”  and to waive all such fines imposed. The budget language earmarks a million dollars from the general fund to reimburse any such fines and fees that were paid into the general fund and directs that any fines and fees paid into nongeneral fund accounts be reimbursed from those accounts. (See language beginning on line 51 of page 579 of the .pdf version of the budget bill.)

I get it. Youngkin ran on a platform opposed to the COVID-19 restrictions imposed by Governor Northam, promising to remove them. In announcing his intention to propose reimbursement of any fines collected, he called them “unjust” and many in his base consider the COVID restrictions imposed by Northam unconstitutional.

Nevertheless, the Virginia Supreme Court refused to block any of the restrictions contained in the Northam executive orders. Therefore, the restrictions and orders were legal. That makes the individuals and businesses involved lawbreakers and the fines and fees levied were their penalty.

If we are going to get into the business of reparations for lawbreakers, why stop with COVID violators? In 2020, the General Assembly decriminalized possession of marijuana and made possession a civil offense, punishable by a fine of up to $25. The next year the legislature repealed altogether the prohibition on possession of marijuana. It follows that, if the legislature were to agree now with the governor that folks who violated legal restrictions that are no longer considered warranted should have their fines waived or reimbursed, folks who were convicted in the past of a law no longer considered warranted (possession of marijuana) should have their fines and court costs reimbursed or waived if still outstanding.

Youngkin’s Budget Amendments: No Radical Changes

by Dick Hall-Sizemore

Budget is policy. The budget reflects the policy choices a government makes.

Any Virginia governor, upon assuming office, inherits a biennial budget proposal developed by his predecessor. The new governor is limited significantly in the changes that he can affect in that budget in his first General Assembly session. If the new governor is of a different party than the preceding one, it is likely that he will be bringing in a new senior financial team, as well as a new policy staff and cabinet. Because it takes time for these new staff members to become acclimated, it is not unusual for the new governor (by now, not so new) to propose mostly marginal changes in the mid-biennial budget he presents to the General Assembly. It is in his second year in office that a Virginia governor gets to propose a biennial budget that is truly his and which will bear his policy imprint.

Nevertheless, based on his campaign rhetoric and his promises after he assumed office, I expected Governor Youngkin to make substantial proposals — cutting or eliminating some programs, along with some major initiatives. By and large, however, his budget proposals build upon what was already in place when he took office. The possible exceptions are one instance (behavioral health) in which he has chosen to put new emphasis on one aspect and another, resiliency and protecting the Chesapeake Bay, for which he has proposed a surprisingly large increase in funding. Continue reading

RVA 5X5: A Five-Part Series of Stories

by Jon Baliles

STORY #1 — The Pot Overfloweth

There have been a lot of stories this week about the $21 million surplus announced by Mayor Levar Stoney and what he is asking City Council to endorse and how to disburse it in a budget amendment vote scheduled for a Monday evening vote. “The growth of the real estate market has caused the taxable real property revenue to exceed the budgeted amount,” the mayor wrote in a letter to Council.

Dean Mirshahi at WRIC reports that out of the $17 million, $5 million would be used to improve pay scales for first responders and $3.1 million for inclement weather shelters — two things that are definitely needed and long overdue.

There is an allocation of $1,750,000 to the Department of Economic Development for “contractual increases” involving Richmond’s Diamond District and City Center projects. No one knows what this means, but the Diamond District developer made it clear to VPM News that they were not recipients of any of that allocation (so put away the conspiracy theories). Maybe an explanation is forthcoming Monday night (or maybe not).

Some of the other funding includes $1.1 million for traffic calming projects; $1 million each for the nonprofits HumanKind and Homeward to provide family crisis services and homeless services; $500,000 to NextUP RVA, a free program for Richmond Public Schools middle school students; $2 million would go to a reserve fund to help offset rising health care costs for city employees; about $450,000 for employees assisting with added translation and interpretation services; and $400,000 for the YMCA’s Help1RVA helpline for people in crisis or considering suicide.

The biggest item is $5 million for first responders, which includes $2.6 million for the Richmond Police Department, $1.9 million for the Richmond Fire Department, and $559,000 for the Department of Emergency Communications for pay adjustments that the city says were not accounted for in the pay raises approved last May.

VPM noted that “a press release from the mayor’s office said those pay adjustments would be for employees not accounted for in a $17 million increase in first-responder wages in May’s budget.” Continue reading

Virginia Mental Health Services in Deep Trouble – A Survey

Eastern State Hospital. Courtesy Virginia Department of Behavioral Health and Development

by James C. Sherlock

Nov. 29 updates in blue.

Supply cannot begin to keep up with demand.

In this case, the consequences involve personal welfare and public safety. And they can be terrible in both cases.

Governor Youngkin will propose to the 2023 General Assembly additional funding and policy prescriptions for the state’s mental health system.

The state offers inpatient services, community-based government services, and Medicaid-funded services.  Medicare offers payments to participating hospitals. Private insurances offer coverage.

I say “offer,” because much of what policy prescribes has proven difficult to fill in practice.

Virginia’s mental health system is in deep trouble because of shortages of personnel and facilities to absorb the very steep rates of increases in persons needing assistance.

The personnel problems are twofold and affect both government and private services.

  1. Key personnel positions require trained specialists, the shortages of whom are manifest across the country; and
  2. Working conditions in mental health care are very stressful, physically demanding and dangerous, driving away badly needed low skilled workers who can easily find jobs elsewhere.

Medicaid programs offer services that private facilities and practitioners, facing the same labor shortages, have proven in some combination unable or unwilling to provide at Medicaid reimbursement rates. State-contracted Medicaid Managed Care Organizations (MMCOs) have not solved those problems.

So part of the answer is money, but we really don’t know how much. And in this case, money alone may not provide sufficient services to satisfy demand. Continue reading

State Treasury Brings In More General Fund Revenues Than Projected

by Dick Hall-Sizemore

Some commenters on this blog have expressed serious concern about the choices facing Governor Youngkin this fall in the development of his recommended amendments to the state’s two-year budget. They cite the prospects of recession and the uncertainty created by such prospects. They can rest a little easier for now.

The Secretary of Finance has informed the Governor that the Commonwealth’s first quarter general fund revenues for the current fiscal year are $500 million ahead of projections, or 7.6%. In September alone, after adjusting for timing differences, “total general fund revenues increased 10.7 percent for the month compared to a year ago.” Continue reading

Predicting State Revenue in the Face of Inflation and Recession – Bipartisan Issues, Bipartisan Approach, Damnably Difficult

Courtesy WTAE TV Pittsburg

by James C. Sherlock

Governor Youngkin on Wednesday spoke to the Joint Advisory Board of Economists (the Board), part of a genuinely bipartisan structure established under Virginia law to support revenue assessments.

Which in turn must be used to support budgets. Which are, at least in Virginia, far more political than the revenue estimates.

The process is governed by Code of Virginia § 2.2-1503. Filing of six-year revenue plan by Governor.

In accordance with that law, every year by December 15 the Governor  must prepare and submit to the members of the General Assembly an estimate of anticipated General Fund revenue, an estimate of anticipated transportation fund revenues, and estimates of anticipated revenues for each of the remaining major non-general funds, for a prospective period of six years.

In Glenn Youngkin, Virginia may never have had a governor with large scale revenue estimates so clearly in his experiential wheelhouse. He is a valuable asset when this year those estimates will be perhaps as difficult as they have been in at least four decades.

Wrong or right, especially for the coming year, they will have major impacts.

  • Inflation can inflate both government revenues and government costs in perhaps unequal measure; and
  • Recession can bring decreased revenue in the face of increasing demands for services.

Continue reading

Budget Earmarks for Nonstate Entities

by Dick Hall-Sizemore

For many years, the most interesting and fun portion of the state Appropriation Act was a section near the end entitled, “State Grants to Nonstate Entities-Nonstate Agencies.” The 2000 Appropriation Act, appropriating almost $36 million for these nonstate entities, is a good example. It included funding for historic courthouses, local museums and historical societies, and the houses of Founding Fathers, as well as for larger, statewide museums and organizations.

Most of the amounts provided were small, especially in the context of the overall Appropriation Act. However, they were important to the local recipients and served to add to the political capital of the local legislators who sponsored the appropriations.

In 2011, Attorney General Ken Cuccinelli threw what seemed to be a monkey wrench into this process. In an official opinion, he declared that such appropriations, although they may “serve noble purposes,” were in violation of the state constitution. Article IV, Section 16, of the Virginia Constitution plainly prohibits “any appropriation of public funds, personal property, or real estate…to any charitable institution which is not owned or controlled by the Commonwealth.” For years the legislature had operated under the legal fiction that such appropriations were not to “charitable” organizations, but for “historical” or “cultural” ones. Indeed the title of the budget program used for these appropriations is “Financial Assistance for Cultural and Artistic Affairs.” The Attorney General’s opinion ended that charade. Continue reading