Fri07252014

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Lack of state budget incites requests for legislators to act

Various proposals for solving the state budget crisis and for urging local officials to act are appearing in letters and opinion pages across the state. The state has still not passed a budget for 2014-15, with the start of the fiscal year looming on July 1.

That means if no state appropriation act is in place July 1, taxes and other revenues of the Commonwealth will continue to be deposited into the state Treasury, but no moneys can be paid out of the State Treasury.
It means no appropriations for state employees, including those providing vital services including health, safety, social services and education, including colleges and universities.  

That also means no appropriations can be made to localities with a large chunk of local services funded by the return of state tax dollars to fund portions of local government budgets for similar services provided locally, as noted above, along with libraries, 4-H/Extension, and numerous other areas of all of our lives that will be affected.

As the deadline for action draws closer, some are asking local officials to urge state legislators to action. But both sides appear entrenched in their positions over Medicaid expansion and have the issue tied up in the budget.

HANGER LETTER
Last week on May 26, state Senator Emmett Hanger, chairman of both the Medicaid Innovation & Reform Commission and the Senate Finance-Health & Human Resources Subcommittee, offered a proposal intended to serve as the basis for a compromise between the House, the Senate, and the Governor regarding Medicaid.

Hanger says his proposal would allow legislators to move quickly to final passage of a state budget. Compromise would be necessary. But legislators must be urged to act.

JONES LETTER
Last week on May 28, S. Chris Jones, chairman of the House of Delegates Appropriations Committee wrote to local officials saying that the Commonwealth’s revenue receipts for the month of May were about $300-$350 million below projections primarily due to the continued sluggishness of the national economy along with a decline in sales, income and corporate tax collections.

That could lead to a significant revenue shortfall for the current and next fiscal years. Jones noted that a potential shortfall could exceed $1 billion for the biennium. He also said without a budget in place for 2014-15, the Governor and the General Assembly cannot utilize the Revenue Stabilization Fund, often called the “rainy day fund,” to offset a downward revision in general fund revenues that would affect state and local government revenues.

Jones added, “Medicaid expansion is the only substantive issue delaying adoption of the budget. However, regardless of one’s position on that issue, the consequences of failing to pass the budget by July 1 are simply too grave to delay any longer.”

He suggested setting the question of Medicaid expansion aside and completing work on the state budget immediately, adding that after a budget is passed, legislators could and should return to Richmond for a separate special session related to Medicaid expansion.

VSBA LETTER
Last week on May 29, Virginia School Boards Association (VSBA) officials, superintendents and some school board chairmen participated in a conference call with Secretary of Education Anne Holton, Secretary of Finance Ric Brown, Deputy Chief of Staff Suzette Denslow and Director of the Department of Planning and Budget Dan Timberlake regarding the current budget impasse.

The call and a subsequent email correspondence from VSBA’s Emily V. Webb, Government Relations Coordinator, to local school officials reiterated the warnings contained in the other letters and basically asked them to reach out to their local legislators and encourage them to quickly pass a budget.

KING GEORGE USES FOR STATE FUNDING
Here’s a reminder of how the state assists King George by returning state tax dollars to the county for its use in the county budget.

About 40 percent of the King George County budget is comprised of state funding, adding up to $27.5 million of the $68,202,063 total county budget.

The largest share of state funding goes for the School Board (57 percent of the School Board’s budget). Below are the rest of the amounts of state revenue for various departments, along with the percentages for each of those department budgets.
-  $1.7 million for Social Services/CSA (40 percent of budget)
-  $985k for Sheriff (28 percent of budget)
-  $276k for Commonwealth Attorney (50 percent of budget)
-  $215k for Clerk of Circuit Court (52 percent of budget)
-  $115k for Comm. of Revenue (30 percent of budget)
-  $92k for Library (18 percent of budget)
-  $89k for Treasurer (30 percent of budget)
-  $42k for Registrar (34 percent of budget)   

Phyllis Cook

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