By Laura Vozzella,
RICHMOND — Bowing to diminished Democratic power and a looming government shutdown, the Senate Finance Committee voted Thursday for a budget that eliminates Medicaid expansion and almost all new spending.
The nearly unanimous vote was another step toward ending the protracted budget-and-Medicaid standoff that has consumed the state Capitol for most of the year. But it was no guarantee that the fighting was over or that a shutdown would be averted.
The plan still needs approval from the full Senate and House, and then from Gov. Terry McAuliffe (D), for there to be a budget in place in time for the start of the new fiscal year July 1.
The Senate was in limbo Thursday night, hours after the chamber had been scheduled to vote on the budget and send it to the House.
Senate Republicans, who gained control of what had been an evenly split chamber Monday when a Democratic senator unexpectedly resigned, were huddled behind closed doors, fighting among themselves.
They were arguing over whether they should pass the budget deal struck this week between a bipartisan group of House and Senate budget negotiators, or amend it to make it harder for McAuliffe to expand Medicaid without legislative approval.
Sen. Richard H. Black (R-Loudoun) wanted to introduce a floor amendment intended to prevent McAuliffe from trying to expand Medicaid by executive order — something the governor has quietly explored.
News of the GOP discord leaked out via Twitter even as the GOP caucus was privately fighting it out.
A tweet from Sen. Tom Garrett (R-Louisa) said, “#blackorbust I WON’T vote for a budget that lacks #dickblack amendment,” and “The full GA should vote up or down on #medicaidexpansion. No tricks.”
Even if the budget plan clears the Senate and House, McAuliffe’s support is by no means assured. McAuliffe, who made Medicaid expansion the centerpiece of his campaign last fall, vowed during the race and at some points as governor that he would not sign a budget that did not provide health insurance to 400,000 uninsured Virginians.
His office has not indicated whether he would go along with the current budget plan, which House and Senate budget negotiators started hashing out behind the scenes a few weeks ago after new state revenue forecasts projected a $1.5 billion shortfall over the two-year budget period.
“Obviously, he wants Medicaid in there — he thinks it’s the right thing for Virginia. But right now, it’s the General Assembly’s responsibility to send him a budget, and the governor will review it carefully,” McAuliffe spokesman Brian Coy said earlier in the week. “We will make announcements about whatever actions he takes when the review is complete.”
The House and Senate were scheduled to vote on the budget Thursday night, but action on the floor was repeatedly delayed so Republican senators could meet privately.
The day before, Black had expressed concern that language buried deep in the budget bill could authorize the governor to expand Medicaid by executive order.
Black pointed to language in the budget stating: “There is hereby appropriated sum sufficient nongeneral funds for such costs as may be incurred to implement coverage for newly eligible individuals pursuant to . . . the Patient Protection and Affordable Care Act.”
Matthew Moran, a spokesman for House Speaker William J. Howell (R-Stafford), has said the language would not give a governor authority to expand Medicaid on his own. He said it was carried over from the previous budget. Its purpose is to authorize additional Medicaid spending if — and only if — a state Medicaid commission set up by the legislature agrees to expansion, he said.
The budget plan calls for holding most state spending at current levels to account for a projected budget shortfall that has grown in recent weeks to $1.5 billion. The rival budget plans produced by the House and Senate during the regular General Assembly session were both more flush, with extra money for state employee pay raises, universities, hospitals and K-12 education.
But those plans died when legislators failed to strike a budget deal before the regular session concluded March 8. The main sticking point then was whether to expand Medicaid under the Affordable Care Act; McAuliffe, Senate Democrats and three moderate Republicans in that chamber support expanding health-care coverage to as many as 400,000 uninsured Virginians. The GOP-dominated House is firmly opposed, questioning whether Washington can afford to keep its promise to pick up most of the $2 billion-a-year tab.
State budget officials said the cause of the shortfall was primarily a miscalculation of capital gains tax revenue; forecasters misinterpreted a one-time spike, triggered by an anticipated change in federal tax policy, as a long-term rise that they could count on in the current budget and beyond.
The projected shortfall added urgency to the long-stalled negotiations. So did the fast-approaching July 1 deadline.
The final breakthrough came Monday, when a Democratic senator from southwest Virginia stepped down, suddenly giving Republicans a 20-to-19 edge in the chamber.
The three moderate Senate Republicans continue to support a form of Medicaid expansion. Even with the departure of Sen. Phillip P. Puckett (D-Russell), expansion supporters still outnumber opponents in that chamber 22 to 17.
But with the House showing no signs of budging and a potential shutdown looming, they have agreed that the budget must come first. A moderate Democrat, Senate Finance Committee Chairman Charles J. Colgan (Prince William), has also indicated that he thinks the state needs to get a budget in place first.
It remains to be seen how McAuliffe will react to the budget. Once it reaches his desk, he will have seven days to make changes and send the bill back to the legislature.
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