Governor McAuliffe announces state has $136 million budget surplus

Governor McAuliffe announces state has $136 million budget surplus

RICHMOND, VA (WWBT) - Governor McAuliffe announced the state has a $136 million surplus this year.  While unveiling his proposed budget for the next fiscal year, he again called for Medicaid expansion.

The governor pitched his proposed budget before a joint meeting of the Senate Finance and House Appropriations committees on Monday in their new temporary home in the Pocahontas Building.

Some of the surplus, he said, must be used for designated special funds, such as one for water quality.  But he agreed with Republican leadership to put $121 million into a rainy day fund because he says it's going to rain.

Governor McAuliffe wants to save the surplus money to help cover budget cuts he expects from President Trump's proposed federal budget.

"The president's vision includes cutting funding for the Appalachian Regional Commission, eliminating community development block grants, lowering home energy assistance programs, and rural economic development and poverty alleviation programs.  It would totally eliminate Chesapeake Bay cleanup efforts and the progress seen over the last few years," said McAuliffe.

There's also a question lawmakers must weigh when considering this proposed budget.  The state could continue to see revenue declines from Sequestration.  However, President Trump has also proposed increasing military spending.

"While the proposal does promise increases in defense spending, as you all know it will take years to realize any positive impacts of that investment.  We cannot afford to slash existing economic programs while we wait for new defense programs to kick in," said McAuliffe.

The governor urged the committees to boost pay for state troopers to help fill more than 300 open sworn and civilian positions.  And he prioritized two big expenses for the state.

First, the cost of benchmarking the Standards of Education.

"It will be a high priority to increase costs of this rebasing exercise as we move forward, and let me be clear it will cost hundreds of millions of dollars," said McAuliffe.

Republican Chris Jones, Chair of the House Appropriations had less concern about the costs.

"We don't know what the next four or five months will bring as far as revenue growth.  But what I do know is whatever the numbers are, we will adjust and we'll deal with it," said Jones.

The governor said his second top priority would be expanding Medicaid coverage under the Affordable Care Act.

"We still have an opportunity to save money and increase health care coverage now that the Affordable Care Act will remain the law of the land indefinitely," he said.

"If you look at Kentucky, they were $4.2 billion over budget, Ohio by $3.2 billion over budget.  So the states that have done it, it has not been the panacea the governor talks about," said House Majority Leader Kirk Cox (R - Colonial Heights).

The Republican-controlled House and Senate have rejected Medicaid expansion three times already.  The House of Delegates is up for re-election this year.  It will be up to voters to decide if Republicans maintain their control of the House.

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