Category Archives: Budgets

Who Needs the General Assembly? Let the Budget Conferees Do It.

Sen. Janet Howell (D-Fairfax), chair of Senate Finance and Del. Barry Knight (R-Virginia Beach), chair of House Appropriations. Photo credit: Richmond Times Dispatch

by Dick Hall-Sizemore

Although legislating through the budget, a practice that used to be frowned upon, is not new, this year’s budget conferees are taking the practice to a new dimension.

The amendments released by the budget conferees include the following new provisions in the “General Provisions” section. In most cases, the Code of Virginia is amended. The remaining cases involve just language in the Appropriation Act.

  1. Changes to the tax code. These have become a standard practice.  This year there are provisions to increase the standard deduction, eliminate the state portion of the sales tax on groceries, increase income tax credits for military benefits, and make significant changes to the statutory  language regarding housing opportunity credits.
  2. University housing. To the extent that institutions of higher education operate student housing during breaks, requires them to allow eligible foster students to stay in them free of charge.
  3. Casino referendum. Prevents the city of Richmond from having a second referendum on casinos until November 2023.
  4. Private school. Exempts a private school from licensing requirements.  (The school was previously exempted until repeal of the applicable statutory provision in 2020.)
  5. Games of skill. Changes the definition of games of skill.
  6. Marijuana and hemp. Establishes a criminal penalty for possession of four ounces to one pound of marijuana. Changes requirements for labeling of products including industrial hemp. This is the first time that I remember the budget bill being used to amend the criminal code and impose a new criminal penalty.

Continue reading

Medicaid, Public Health and Chronic Disease Management

UVa Hospital

by James C. Sherlock

From the CDC:

Chronic diseases have significant health and economic costs in the United States. Preventing chronic diseases, or managing symptoms when prevention is not possible, can reduce these costs.

Virginia pays a great deal of money every year to contractors who manage the care of its Medicaid population.

It is a hard job, but even though the challenges are tough, it has appeared to me for a long time that we are not getting our money’s worth from $18 billion annually in Medicaid payments for the populations managed by these contractors.

A white paper, “Prevent Costly Chronic Disease Through Member Engagement” caught my eye as the basis for a follow up to my earlier report on public health and Medicaid managed care in Petersburg.

This is that update. Continue reading

Fix One Thing — School Physical and Electronic Security

by James C. Sherlock

I offer an apolitical suggestion. We know how to begin to fix school security.

Do it.

Step 1. Every school division has a security instruction. How many of them monitor whether that guidance is being followed? I will let them answer that.

Step 2. The more complete solution is deployment of integrated combinations of physical and electronic security systems. System integrators who specialize in school security can help with requirements definition for any facility and tailor expandable solutions to budgets. That is their business and they are good at it.

As an example of what is possible, see ADT’s integrated intrusion security and fire detection and alarm system offerings for K-12 schools.

When people say “do something”, this is the kind of solution on which all of us can agree. Do it. Continue reading

A Budget Deal Emerges

Sen. Janet Howell (D-Fairfax), chair of Senate Finance and Del. Barry Knight (R-Virginia Beach), chair of House Appropriations. Photo credit: Richmond Times Dispatch

by Dick Hall-Sizemore

The Richmond Times-Dispatch reports there is an agreement on the state budget. There have been hints in the news about it all week, with the General Assembly announcing that it would come back to Richmond June 1 to take up various measures. All the details will not be available until late Sunday or Monday, but the chairs of the two money committees have released the highlights.

I will defer to our tax expert, Steve Haner, to discuss the revenue aspects of the deal. It looks to be the compromise that he has said was on the table all along—some increase in the standard deduction (but not entirely what the Governor proposed) along with a refundable tax credit.

I want to focus on one surprise in the package that represents two major changes in state policy. The proposed deal includes $320 million in general fund appropriations this year and an additional $150 million in the future, contingent on revenue, to help fund the expansion of the “I-64 gap” between Bottoms Bridge near the Henrico/New Kent border and James City County. This is the project I wrote about earlier and, surprisingly to me, engendered a lot of comments. Continue reading

Personnel Shortages that Plague Virginia’s Health Facilities Inspection Staff in the Hands of Budget Negotiators

UVa Hospital

by James C. Sherlock

One of the most important responsibilities of Virginia state government is to inspect medical facilities and home care providers to ensure we are safe when we enter their care.

It continues to fail in that responsibility thanks to years of Virginia budgets that have consciously ignored the need for increased inspector staff and increased salaries with which to competitively hire that staff.

I have reported for a long time that the staffing of the Virginia Department of Health (VDH) Office of Licensing and Certification (OLC) is scandalously deficient. Based upon an update today from OLC, it remains so.

That organization has only half of the inspectors it needs to carry out its defined responsibilities.

Those highly skilled and very dedicated people, largely registered nurses, are asked to do every day for Virginians what we cannot do for ourselves and what our elected representatives have refused for decades to properly fund them to do.

Think of that next time you use the facilities and home providers they are required for your safety to inspect.

We hope the current General Assembly budget negotiators keep it in mind for themselves and their families.

Or the Governor sends the budget back until they do. Continue reading

Inflation and the Budget

by Dick Hall-Sizemore

In addition to conventional budget requests, the Youngkin administration is likely to receive requests from agencies in the fall budget development exercise for additional funding to enable them to cover additional costs resulting from higher inflation. (Yes, I realize that the 2022-2024 biennial budget has not even been agreed upon yet, but, once one round is out of the way, budget folks are always getting ready for the next round.)

With some exceptions, inflation is not normally built into budget bills. Budget development for a biennial budget starts with a base budget, which is the appropriation for the second year of the most recent biennium. Adjustments are made to the base, but rarely are those adjustments for inflation. As for the mid-biennium budget, agencies normally are not provided additional appropriations to cover inflationary costs. Continue reading

What’s the Governor Waiting For?

by Dick Hall-Sizemore

At the reconvened session on April 27, Governor Youngkin returned 116 bills to the General Assembly with recommended amendments. Legislators accepted the Governor’s recommendations on 91 of those bills. The remaining 25 bills were returned to him as originally passed.

The Governor has three options for each of these remaining bills: sign it, veto it, or let it become law without his signature. The deadline for him to take action is midnight, May 27.

What is the Governor waiting for? Yes, he still has 11 days before the deadline, but it was only 25 bills and he has had 19 days to consider them. He already had a folder with notes on each bill. Actually, the batch sent back included several sets of duplicate bills; therefore he has fewer than 25 legislative proposals to act on. Furthermore, he probably knew before he returned the bills which ones he was not going to approve if his recommendations were not accepted. Continue reading

Stoney Versus the Environ-istas

Image credit: Virginia Public Media

by James A. Bacon

Environmental activists in the City of Richmond aren’t happy with Mayor Levar Stoney’s proposed budget. The City’s Draft Climate Equity Action Plan sets a goal of reducing greenhouse gas emissions 45% by 2030 — and reaching net zero by 2050 — but Stoney’s budget plan doesn’t provide funding for conversion to electric vehicles, increasing the city’s urban forestry staff, or phasing out natural gas, as environmentalists would like.

“If we are truly serious about this master plan that puts environmental justice at the forefront, we need to put our money where our mouth is,” said Elle De La Cancela, an organizer with the Chesapeake Climate Action Network, as reported by Virginia Public Media.

“Our funding is not limitless, and we have many priorities in the city,” retorted Stoney spokesperson Jim Nolan in an email. “We have to provide funding for public education, affordable housing and homelessness, basic city services like sanitation and street cleaning, parks, clean water, all of the above.”

This is one of those rare occasions where I side with Stoney. As mayor, he has to consider the interests of a wide range of constituents — not the least of which include the city’s low-income minorities. Murders are up. Schools are melting down. Surging rents are intensifying the homeless problem. And, oh, by the way, the taxpayers paying for all this would like to maintain a modicum of city services like sanitation, pothole-free streets, litter-free parks and the like. The last thing Stoney wants is to preside over an exodus of middle- and upper-income taxpayers from the city. Continue reading

Virginia Budget Deal Stalled as Democrats Demand $3B in Increased Spending

by Shaun Kenney

Just to illustrate how fanatically out of touch Senate Democrats are as they frantically try to spend $3 billion on more government, check out State Senator Scott Surovell (D-Fairfax) on Twitter as he blasts Governor Glenn Youngkin’s proposal for gasoline tax relief:

Remember — we are sitting on a $3bn surplus fueled by COVID relief dollars and not by any metric of economic success. Yet Senate Democrats continue to lean into the hammock of so-called budget cuts as they continue to shove money into the maw of state government for the sake of producing mediocre results. Continue reading

Virginia’s Incredible Money-Spending Machine

by James A. Bacon

Spending by Virginia’s state government isn’t just increasing — spending is increasing at an accelerating rate. The current budget biennium (fiscal 2021-22) and the next (fiscal 2023-24) will have seen the two biggest spending increases of the past nine budget cycles. 

Assuming no modifications to the next biennial budget’s spending totals submitted by former Governor Ralph Northam, the combined General Fund and Non General Fund budgets will have increased 123% in the 17 years between fiscal 2007 and 2024.

(For purposes of comparison, the increase in the Consumer Price Index was 40% between 2007 and 2022. The state population increased 8.2% between 2010 and 2022. Spending has been increasing at roughly double the rate of inflation and population growth.) Continue reading

A SW Virginia View of the Budget Impasse

by Scott Dreyer

Virginia’s headline-grabbing elections last fall put Republicans back in the top three statewide offices for the first time in about a decade and a Republican majority back in the House of Delegates. However, since state senators enjoy four-year terms and none were up for election last November, senate Democrats still hold a slender 21-19 majority. Led by Senator Louise Lucas, D-Portsmouth, who, according to the Virginia Mercury, owns a shop that sells illegal and misidentified marijuana products with labeling targeting children, Senate Democrats have promised to be a “stone wall” against GOP-led proposals from Governor Glenn Youngkin and the House of Delegates. Continue reading

Richmond’s Reaganesque Time for Choosing

Chris Braunlich

by Chris Braunlich

Richmond, like Washington, has always been a place where an “insider’s game” is played – not in a pejorative sense, but simply as the way things are done.

Relationships are paramount, people speak in the arcane language of lawmaking, agendas are confusing for outsiders, and the activities of a subcommittee for an obscure commission are followed in detail because those in the know understand that what happens there will end up as a new regulation. Continue reading

Richmond Parents and Taxpayers, Welcome to Chicago Public Schools

by James C. Sherlock

The gulf between what the City of Richmond School Board (RSB) and the Richmond City Council (RCC) on what will be negotiated with their public unions is actually an ocean.

The RSB has authorized the negotiation of virtually everything about how the schools are run. It leaves nothing off the table except the right to strike and the right to negotiate a closed shop (Virginia is still a right to work state), both of which state law still prohibits. But the unions can negotiate what are essentially the work rules of a closed shop.

In contrast, the City Council is poised to pass an ordinance on May 5th from two candidate drafts, one from Mayor Stoney and the other from three Council members. The Mayor’s version states what will be negotiated — pay and benefits. The other states what will not be negotiated with an eleven-point description of the City’s Rights and Authorities.

The City Council drafts, especially the Mayor’s, have it right. They note the City Council’s duties under the laws of Virginia and to the citizens of their city.

Not so the school board. The RSB resolution acknowledges only one stakeholder: its unions.

Unmentioned in the RSB resolution is exactly who is going to represent the city in its negotiations with its unions. Ideally it will be a team composed of City Council (finance) and School Board subject-matter experts. If so the city reps will be operating under two sets of negotiating rules in direct opposition to one another.

I’d buy a ticket, but maybe under the sunshine laws negotiations will be on TV. Continue reading

A Narrative About Virginia’s Rural Hospitals that Obscures the Facts

by James C. Sherlock

Becker’s Healthcare, a widely read medical news organization, published a story on Friday, “892 hospitals at risk of closure, state by state.” Rural hospitals were the topic.

It cited as its source a report from a non-profit named The Center for Healthcare Quality and Payment Reform (CHQPR), which presents itself as “a national policy center that facilitates improvements in healthcare payment and delivery systems.”

The CHQPR report Rural Hospitals at Risk of Closing claims that twelve of Virginia’s “27″ rural hospitals are at immediate risk of closing. It certainly engaged my interest.

Another CHQPR report, The Crisis in Rural Health Care, has an interactive map where the twelve perhaps can be found.

But the sources of both reports are a mystery, at least to me.

  • First it must be noted that the Virginia Department of Health lists only 20 rural hospitals in the state.
  • Only five of them lost money in 2020 (see the column “Revenue and Gains in Excess of Expenses and Losses”).
  • Four of those are owned by large and profitable health systems that use them to feed more profitable cases to other system hospitals.

It is dangerous to the cause of improving rural healthcare to create “reports” like this. Continue reading

The State Budget: The House Reductions to Cover Tax Cuts

Del. Barry Knight (R-Virginia Beach, chairman, House Appropriations Committee

Budget is policy. A budget reflects what an organization chooses to spend its money on.

The differences between the versions of the 2022-2024 biennial budget passed by the House and Senate this year are starker than they have been in recent memory. There are major philosophical and policy differences that the conferees will need to work out.

However, before they even get to those differences, there is another obstacle they will need to confront: they differ significantly on how much money the state will bring in. They have to agree on ow much money they have to spend before they can seriously discuss how to spend it.

The Senate budget is based on total general fund revenue that is about $3.4 billion higher than projected by the House. (Unless otherwise specified, all funding amounts in this article refer to the general fund.) The reason for the wide gap, of course, is the House adopting greater tax cuts than the Senate. Steve Haner has very ably compared the different approaches to tax cuts on this blog here, here, and here. Continue reading