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Virginia passes budget with Medicaid restriction

By Larry O'Dell -- Associated Press

RICHMOND -- The General Assembly passed a new state budget late Thursday night after adopting a Republican-backed amendment to ensure that Democratic Gov. Terry McAuliffe cannot expand Medicaid without legislative approval.

The action just before midnight closed a tumultuous day of internal GOP wrangling over the last-minute amendment and ended a protracted budget impasse that had threatened to shut down state government when the current spending plan expires June 30.

Now the budget goes to the Democratic governor, who has vowed not to sign a budget that did not expand Medicaid to an additional 400,000 low-income Virginians. McAuliffe, who has not ruled out trying to expand Medicaid by executive fiat, has seven days to act on the budget. He was not pleased by the Republican majority's actions.

"Virginians deserve better than representatives who put narrow ideology ahead of what is best for our families, economy and budget," McAuliffe said in a statement. "When this budget reaches my desk I will evaluate it carefully and take the actions that I deem necessary, but this fight is far from over."

Medicaid expansion was the sticking point that prevented the General Assembly from passing a budget in the session that ended in March. McAuliffe and his fellow Democrats favor expansion, while most Republicans oppose it.

The logjam broke Monday when Democratic Sen. Phil Puckett resigned, giving Republicans a one-seat advantage in the Senate. With the June 30 deadline looming, legislative leaders agreed to enact a budget without Medicaid expansion and consider that issue later.

But the Medicaid issue surprisingly took center stage again when many Republicans, worried that McAuliffe might to try expand the program unilaterally, proposed an amendment to ensure that he cannot. That led to hours of closed-door meetings, followed by impassioned debate on the Senate floor.

Sen. Richard Saslaw, D-Fairfax, said it takes a lot of nerve for any part-time legislator with a state-financed "Cadillac policy" for health care to deny coverage for the working poor.

"You talk about hypocrisy, you're poster children for it," Saslaw said.

Republican Sen. Thomas K. Norment vehemently objected to Democratic Sen. Donald McEachin's description of the GOP action as "immoral," saying he simply had a different policy position.

Norment also said the amendment would "eliminate the uncertainty" over the budget's fate. House GOP leaders had informed senators that many members of their caucus were worried that an existing law giving a state commission authority over Medicaid expansion might not prevent action by McAuliffe on the issue. That commission has been deadlocked on expansion.

On a 20-19 party-line vote, the Senate approved Republican Sen. Bill Stanley's amendment stating that Medicaid expansion cannot be expanded unless the legislature appropriates money to do so. The Senate then voted 21-18 and the House 69-31 to pass the amended budget. Sen. Lynwood Lewis and Del. Johnny Joannou were the only Democrats voting for the budget.

Sen. Emmett Hanger of Augusta County, one of a handful of Republicans favoring a modified Medicaid expansion plan emphasizing the use of private insurers, introduced such a bill to be considered later, perhaps at a special session later this year.

Because of lagging revenues, the budget passed Thursday slashes spending by nearly $900 million and requires a withdrawal from the state's savings account to close a budget shortfall approaching $1.6 billion. Among the biggest losers are state workers and teachers, who won't get the raises that had been included in earlier versions of the proposed budget.

"It's just tough," Rob Jones of the Virginia Education Association said of the axed teacher raises. "I understand the cards they were dealt, but this is just going to put us further behind. Are we doing our best to attract quality teachers to Virginia? No."

The cuts came from increased spending that had been proposed in earlier versions of the budget, essentially keeping funding for most programs at or near current levels. Planned new spending for higher education was cut by $184 million. Public schools took a $166 million hit, although the budget retains additional funding linked to enrollment growth.

Health and human resources spending was trimmed by $80 million. But legislators retained $50 million in additional spending for mental health, which became a priority after state Sen. Creigh Deeds was wounded by a son who then committed suicide hours after being released from an emergency custody order.

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