There’s something about an early morning meeting on less than the usual morning coffee that brings a unique perspective.
The Christopher Newport University Wason Center insiders’ breakfast Thursday was a chance to take a peek at the motivations that made this year’s Medicaid expansion budget compromise possible.
The first hint came from state Sen. Monty Mason, D-Williamsburg, and his thought that maybe it wasn’t such a bad thing to nail down a budget in May rather than in March.
Turns out, reports of state tax collections in the interim showed revenues were running well ahead of what anyone had forecast, he said. That made it easier for legislators to see a way forward on a major priority: pumping up cash reserves.
Mason was too polite to mention that a big difference between the House of Delegates’ budget with Medicaid expansion and the state Senate’s version without expansion was the larger sum the Senate steered to the reserves.
The stronger-than-expected tax collections, and Gov. Ralph Northam’s proposal that all above-forecast revenue go to the reserve were incorporated into the final compromise. That likely made a compromise that used the House’s reserve allocation a bit easier to live with.
Also helpful was the windfall likely to come from the federal tax cuts, state Sen. Frank Wagner, R-Virginia Beach, told the Wason crowd.
“It’s going to be a big positive,” he said. “I think we’re going to be in a lot better financial shape in the Commonwealth of Virginia.”
That windfall — likely to be hundreds of millions of dollars a year — comes because Washington is increasing the amount taxpayers can take as their standard deduction. It was changed from $6,350 for a single person ($12,700 for a couple filing a joint return) to $12,000 ($24,000 for a joint return).
It means tens of thousands of Virginians who itemize deductions now probably will do just as well or better by taking the standard deduction. Since Virginia doesn’t allow itemized state returns unless federal forms are also itemized, that means tens of thousands of taxpayers who might have itemized deductions in the past will be stuck with the state’s low $3,000 standard deduction for individuals ($6,000 for a joint return).
Want to take a bet on the odds of the General Assembly allowing itemization for taxpayers who take the standard federal deduction? Or on a doubling of the state standard deduction?
The more optimistic money picture matters for other features in the compromise budget, too. Mason said the additional funds included in the final compromise for community mental health programs is a big step forward.
Mason worries that Eastern State Hospital is too full — at last report, 99 percent of its beds were filled, when the guideline for safe operation for mental hospitals is more like 85 percent. (At 85 percent, hospitals can handle emergency admissions, even on really rough days.)
Mason likes what he sees of the Department of Behavioral Health’s plans for where it wants to be in four to six years.
“But zero to four years scares me to death; the money simply has to be there,” he said.
Though Mason didn’t mention it at the breakfast, finding funds for mental health was particularly important to one of the two architects of the compromise, state Sen. Emmett Hanger, R-Mount Solon. That boost was also key to making a compromise possible.
Del. Chris Stolle, R-Virginia Beach, who is a doctor, pointed to some reasons for his change of heart on Medicaid. These include the new work requirement for able-bodied beneficiaries and the new co-payments that give beneficiaries what legislators are wont to call “skin in the game.” Stolle also likes the incentives for beneficiaries to sign up to quit smoking and tackle other health risks, such as obesity.
The work requirement really mattered, said Wagner. He has a daughter with intellectual disabilities who works 40 hours a week at Little Creek, and he said that it just didn’t seem right to ask taxpayers to cover able-bodied adults who don’t work.
Other issues
A low-coffee morning also sharpens hearing for legislators’ comments about votes that made fewer headlines.
Del. Marcia “Cia” Price, D-Newport News, said she hoped her success with a measure setting up a student loan ombudsman’s office would be a first step to continued state efforts to ease debt burdens on young people.
Del. David Yancey, R-Newport News, said he hoped his bill to allow the use of worker-retraining tax credits as an incentive to encourage companies to train high school students in technical trades would buoy Virginia’s workforce development efforts.
Mason — reminding the breakfasters that much of the General Assembly’s work involves people from both parties working together — cited a measure to open access to court records as an example.
In response to issues raised by the Daily Press’s court case arguing that a database of court case status reports ought to be a public document, Mason and Del. Mike Mullin, D-Newport News, teamed up with state Sen Mark Obenshain, R-Rockingham, and Del. Greg Habeeb, R-Salem, on a measure that addressed concerns of court clerks and open government advocates. The measure passed unanimously.
Wagner highlighted his controversial electric utility regulation bill — he called it “a 67-page monster” — as a major accomplishment. It ends a rate freeze that has allowed utilities to collect excess profits, and says some of that money must be used to roll back electric rates, while some should finance hundreds of millions of dollars of investment in renewable energy and improvements to the electric grid. Critics said rates should be cut more and that the renewable energy and grid financing measures needed closer regulatory oversight.
Stolle said Hampton Roads will benefit because the General Assembly put a floor under the regional gas tax that has fast-tracked widening of Interstate 64 and will fund additional tubes and lanes for the Hampton Roads Bridge-Tunnel.
That red ‘Vette— politically speaking
Remember what we call it when gracefully aging gentlemen start thinking that a bright red Corvette is just what they need?
“I had that unfortunate midlife crisis and ran for governor,” Wagner reminisced at the Wason Center breakfast, referring to the 2017 GOP primary when he finished third of three candidates, with 14 percent of the vote.
“I’m over it.”
Ress can be reached by telephone at 757-247-4535