McAuliffe proposes Virginia state budget changes

Virginia Gov. Terry McAuliffe addresses a joint meeting of the House Appropriations committee and the Senate Finance committee at the General Assembly Building in Richmond, Va., Wednesday, Dec. 17, 2014, to outline his proposed changes to the current two year budget. (AP Photo/Richmond Times-Dispatch, Bob Brown)

RICHMOND, Va. (AP) — Gov. Terry McAuliffe wants to more than double the pot of money he can spend trying to attract companies to Virginia, ease school districts’ teacher retirement burdens, and give raises to rookie deputy sheriffs.

To help pay for these and other programs, McAuliffe wants to limit tax credits designed to bolster the coal industry and sell off $250 million worth of unclaimed property that’s been turned over to the state.

The Democratic governor unveiled these and other proposed changes to the state’s biennial budget Wednesday at a Capitol briefing to state lawmakers. He said he was proposing common sense ideas that should garner bipartisan support when the GOP-controlled General Assembly takes up his budget during the 2015 legislative session, which begins in January.

“We literally have gone through every single item in the budget and we’ve done it in a way to try and protect our core assets,” McAuliffe told reporters after his presentation.

But while Republican leaders praised some of McAuliffe’s proposals, they acted coolly toward others and made it clear that they will be responsible for determining what the final budget looks like.

Much of the current budget season has been marked by bad news as revenues have come in smaller than initially forecast, thanks partly to a slowdown in federal defense spending. Lawmakers and McAuliffe already adjusted the current budget in September, when they agreed to tap the state’s rainy day fund and making cuts to higher education and aid to local governments.

Budget officials said the situation has brightened in recent months due to several factors, including large savings in the state’s current Medicaid program, slower-than expected public school enrollment and low interest rates. These factors spared McAuliffe from having to make draconian cuts, allowed him to avoid eliminating money for K-12 public education and gave him new money to put into some of his top policy goals.

McAuliffe also wants to use a one-time $250 million sell off of unclaimed property that’s been turned over to the state, like stocks, bonds and insurance policies, to help reduce school districts’ teacher retirement liabilities and future costs and to help with new school construction.

One of the governor’s top priorities is to put an additional $10 million a year in the Governor’s Development Opportunity Fund, which McAuliffe has used to help lure companies to locate in Virginia. Currently, the governor has about $7.5 million a year available to spend.

In his speech to lawmakers, McAuliffe touted his record of bringing foreign companies, particularly Chinese firms, to Virginia and ticked off a list of 18 foreign ambassadors he’s met with as part of his effort to boost the state’s economy.

The governor also is looking boost state funding by putting new limits on Virginia’s tax credit program for the coal industry, which was designed to help increase the demand for coal and increase hiring by coal companies. McAuliffe cited a review by the Joint Legislative Audit and Review Commission, General Assembly’s watchdog agency, which found the coal credits don’t appear to be reaching their intended goals. Other changes to tax policy proposed by McAuliffe include limiting tax credits for land preservation and combining the state’s three sales tax holidays into one three-day event in August.

And the governor said he was fulfilling a campaign promise by increasing the salaries of deputy sheriffs so that new officers will no longer have to apply for public assistance in order to make ends meet.

“I think that it’s a disgrace that in the commonwealth of Virginia that our deputy sheriffs are on food stamps,” McAuliffe said.

The governor is also renewing his push to expand Medicaid, a longshot top legislative priority that’s been repeatedly blocked by Republican lawmakers who control the General Assembly.

Republican Senate Majority Leader Thomas K. Norment, Jr. said the governor’s proposal to expand Medicaid and his embrace of “the coal-killing policies” of the Obama administration — along with McAuliffe’s recent announcement of proposed gun control measures — showed that the governor’s rhetoric did not match his actions.

“While he talks about bipartisan collaboration, he throws out hand grenade issues he knows are going to be very divisive,” Norment said.

 

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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