Key Budget Policy Choices

Size: px

Start display at page:

Download "Key Budget Policy Choices"

Bryan Chapman
6 years ago
Views:

Comparing the governor s and money committee budgets to the FY16 budget 1 February 2016 The House Appropriations and Senate Finance committees have released their proposed changes to the governor s

1 Comparing the governor s and money committee budgets to the FY16 budget 1 February 2016 The House Appropriations and Senate Finance committees have released their proposed changes to the governor s (FYs 17 and 18) budget. The chart below provides a summary level assessment of key changes and other noteworthy information proposed by the money committees and governor compared to the FY16 baseline. Please contact us for more detailed analysis on these or other key aspects within these proposals. Total General Fund (GF) Spending $40.64 billion $40.77 billion $40.62 billion Leftover Balance $17.6 million $57.2 million $5.2 million Resources Total GF Tax Revenue After Policy Changes Total Other GF Resources $38.41 billion $38.53 billion $38.54 billion $2.25 billion $2.30 billion $2.09 billion Tax Policy Changes (Revenue Lost) Limits the accelerated sales tax to retailers >$25m in annual sales Increases existing R&D tax credit and establishes a new one Establishes a new tax credit and deduction Increases Neighborhood Assistance Act credit caps Reduces corporate tax rate to 5.75% Increases individual income tax exemptions Increases angel investor tax credit -$204.6m -$16.0m -$1.2m -$10.0m -$42.0m -$8.0m with more funding -$95.9m -$21.0m -$1.2m -$10.0m with more funding Federal tax conformity -$86.2m -$21.0m -$1.2m -$0.3m Tax Policy Changes (Revenue Gained) No tax policy changes that gain revenue. Repeals the Political Contribution Tax Credit Repeals interest on some sales tax exemption refunds Caps Coal Tax Credit Compliance Revenue Firearm Transactions $6.7m $0.7m $3.8m $1.1m $0.2m $0.9m Repeals the Political Contribution Tax Credit Repeals interest on some sales tax exemption refunds Caps Coal Tax Credit AirBnB taxation $6.3m $0.7m $3.8m $1.1m $0.7m Contact: Joe Stanley Director of Policy joe@thecommonwealthinstitute.org

2 Comparing the governor s and money committee budgets to the FY16 budget 2 Health Care Medicaid Expansion Closes the coverage gap January 1, 2017 with projected enrollment of 353,000 people (net savings). -$156.9m Does not close the coverage gap, removes $3 billion in federal funds related to coverage expansion, reverses governor s identified budget savings in health care related services and provides additional general funds instead, and includes language for a health care reform legislative study group. Does not close the coverage gap, removes $3 billion in federal funds related to coverage expansion, reverses governor s identified budget savings in health care related services and provides additional general funds instead, includes language to reinstate the MIRC, and prevent governor acting unilaterally. Provider Assessment Includes a 3% hospital provider assessment that could be used to offset future costs of closing the coverage gap. Removes the hospital provider assessment. Removes the hospital provider assessment. Medicaid Provider Rates Total payment rate adjustments withheld: -$60.6m Total payment rate adjustments withheld: -$15.4m Total payment rate adjustments withheld: -$60.6m Freezes hospital payment rates in both fiscal years Freezes nursing home payment rates in FY18 Freezes outpatient rehab & home health agency rates in FY18 -$47.7m -$12.7m -$0.2m Provides hospital payment rate adjustments in FY17 but not for FY18 Provides nursing home payment rate adjustments for FY17 and FY18 Provides outpatient rehab & home health agency rate adjustments for FY17 and FY18 -$15.4m $0.0m $0.0m -$47.7m -$12.7m -$0.2m Governor s Access Program (GAP) Supplants program with full coverage through Medicaid Expansion (savings noted above). Maintains eligibility at 60% of Federal Poverty Level (FPL). Increases eligiblity to 80% from 60% of Federal Poverty Level (FPL). $5.4m Children s Health Insurance Program (FAMIS) Federal Medical Assistance Percentage (FMAP) increases to 88% from 65%, requiring less state funding. -$64.1m -$64.1m -$64.1m Department of Justice (DOJ) Settlement Includes 855 additional ID/DD slots and 100 reserve slots. $49.8m Includes 1,255 additional ID/DD slots but not the 100 reserve slots. $48.5m Includes 1,005 additional ID/DD slots and 100 reserve slots. $53.6m Increases services and rates, adds new staff, and closes training centers. $53.3m, with less funds for staff. $52.5m, with less funds for services and staff. $50.6m Substance Abuse Treatment Expands coverage for Medicaid Substance Use Disorder treatment services. $11.0m $11.0m $11.0m Community Behavioral Health Services Maintains current funding for other community behavioral health services. Increases funding for community behavioral health services. $15.0m Increases funding for community behavioral health services. $12.5m

3 Comparing the governor s and money committee budgets to the FY16 budget 3 PreK-12 Ed. State Per Pupil Direct Aid Provides $5,283 in FY17 and $5,478 Provides $5,284 in FY17 and $5,461 Provides $5,299 in FY17 and $5,500 Per Pupil Aid in Highest Poverty Areas Increased by $629 per pupil Increased by $626 per pupil Increased by $599 per pupil Rebenchmarking Required funding to keep up with enrollment and inflation. $429.8m Required funding to keep up with enrollment and inflation (includes technical updates). $400.7m Required funding to keep up with enrollment and inflation (includes technical updates). $400.7m Additional Support for Instruction Provides the state s share of support for about 2,500 additional instructional positions with local matching requirement. $139.1m Provides school divisions additional support for classroom needs with no local match requirement. Some funds allocated on the state s per student share and others allocated per school. $120.6m Provides school divisions additional support on a flat per student basis with no local matching requirement. $252.4m At-Risk Add- On Enhances support for the At-Risk Program to provide drop-out prevention and other services for students living in poverty. $49.7m Provides a smaller increase than proposed in the governor s budget. $28.2m Offers no enhancements to At-Risk Program. Cost of Competing Adjustment (COCA) Restores the COCA for Northern Virginia school divisions in recognizing support staff $40.6m Restores some of the COCA for Northern Virginia school divisions in recognizing support staff in both fiscal years. $32.3m $40.6m Funding for Governor s Schools Phases in new funding formula similar to the Standards of Quality. $5.6m $5.6m Maintains current funding for Governor s Schools. Teacher Improvement Incentive Fund Creates new grant program in FY18 to initiate incentive-based teacher compensation. $4.3m Salary Increases in FY18 of 2% salary increase. in FY17 of 2% salary increase. $134.3m with revenue contingency. Virginia Early Childhood Foundation Creates grant program to encourage local school divisions to partner with private providers in the delivery of Pre-K and for scholarships to train instructors. $6.9m $6.9m Creates new grant program, but reduces funding for scholarships to train instructors from governor s proposed budget. $4.6m Virginia Preschool Initiative (VPI) Does not increase VPI per pupil reimbursement. Increases VPI per pupil reimbursement $5.8m Does not increase VPI per pupil reimbursement.

4 Comparing the governor s and money committee budgets to the FY16 budget 4 Higher Ed. Higher Education Operating Funding Total operating funding Provides funds for access and completion Increases undergrad Establishes workforce credential initiative Support for faculty salary increases (see Compensation) Establishes GMU and ODU online degree completion Increases support for other higher ed (nonresearch) initiatives Does not include additional support for operations and maintenance of new facilities Funds additional cybersecurity initiatives Brings state support at ODU and EVMS closer to recommended amounts Does not increase graduate $192.5m $50.0m $48.2m $24.6m $17.0m $8.1m $24.2m $15.1m $5.3m Total operating funding Provides funds for access and completion Increases undergrad Establishes workforce credential initiative Support for faculty salary increases (see Compensation) Establishes GMU and ODU online degree completion Increases support for other higher ed (nonresearch) initiatives Includes additional support for operations and maintenance of new facilities Funds additional cybersecurity initiatives Brings state support at ODU and EVMS closer to recommended amounts Increases graduate Restores interest earnings and credit card rebate $217.5m $50.0m $48.2m $23.0m $29.5m $3.0m $3.8m $23.6m $13.0m $5.3m $10.1m $8.0m Total operating funding Provides funds for access and affordability for instate undergraduates Increases undergrad Establishes workforce credential initiative Support for faculty salary increases (see Compensation) Establishes GMU and ODU online degree completion Does not increase support for other higher ed (nonresearch) initiatives Does not include additional support for operations and maintenance of new facilities Does not fund additional cybersecurity initiatives Does not bring state support at ODU and EVMS closer to recommended amounts Does not increase graduate $236.2m $123.4m $52.7m $12.0m $44.0m $4.0m $0.0m Social Services Temporary Assistance for Needy Families (TANF) Fund Uses $24.4m in TANF money to increase funding for nonprofits and create a long-acting reversible contraception program. Uses $20.4m in TANF money to increase funding for nonprofits and workforce development. Uses $25.4m in TANF money to increase funding for nonprofits. No increase in TANF cash assistance. Uses $4.7m in TANF funds to increase TANF cash assistance 2.5%. Uses $9.6m in TANF money to provide child support supplemental payments. Foster Care and Adoption Extends access to foster care services up to age 21 (Net GF cost is $1.9m due to this providing some savings in the CSA budget). $1.9m $1.9m Does not extend access to foster care services up to age 21.

5 Comparing the governor s and money committee budgets to the FY16 budget 5 Compensation Salary Increases Increases salaries 2% for state, state-supported local, and faculty in FY18 with contingency on hitting revenue targets. $76.2m Increases salaries 2% for state, state-supported local, and faculty in FY17. $132.7m Increases salaries 3% in FY17 for state, state-supported local, and faculty and an additional 1% in FY18, all contingent on hitting revenue targets. $226.1m in FY18 of 2% salary increase for K-12. in FY17 of 2% salary increase for K-12. $134.3m with contingency on hitting revenue targets. Funds salary compression for sheriffs and jail employees. $12.3m $12.3m Funds career development for elected constitutional officers. $7.0m $7.0m Provides funds to address state police salary compression. $8.0m Provides funds to address state police salary compression. $12.2m Funds salary initiative for district court clerks. $6.0m Virginia Retirement System (VRS) Funds accelerated phasein of employer retirement contributions for state employee plans at 100% of Board-approved rates. $23.5m Same as the Governor s $23.5m Funds accelerated phasein of employer retirement contributions for state employee plans at 100% Board-approved rates. Spends $189.5m in FY16 to fully repay deferred VRS contributions from FY11-12 early (savings of $44m in FY17-18). -$44.0m Funds accelerated phase-in of state share of employer retirement contributions for teacher retirement plans at 100% of Board-approved rate $55.1m $55.1m but also includes state share of employer contribution for group life in FY17. $56.8m State Employee Health Insurance Program Pays employers share over the biennium and employees share in FY17 for increasing health insurance premiums. $143.2m Pays employers share over the biennium for increasing health insurance premiums. $137.3m Pays employers share over the biennium for increasing health insurance premiums. $137.3m

6 Comparing the governor s and money committee budgets to the FY16 budget 6 Other Revenue Stabilization Fund (Rainy Day Fund) Makes required FY17 deposit. $605.5m $605.5m $605.5m Capital Budget $2.9 billion for capital projects, including $151.3 million in general fund cash. $2.4 billion for capital projects, including $1.4 billion from SB731 and $149.1 million in general fund cash. $2.5 billion for capital projects, including $1.5 billion from HB1344. No GF cash toward capital projects. Includes $90.5m to plan and build two new youth prisons. Only includes planning money for one new youth prison. Only includes planning money for one new youth prison. Juvenile Justice Operating Funding Allows the reinvestment of savings from closing facilities into communitybased accountability and treatment programs. Allows the reinvestment of savings from closing facilities into communitybased accountability and treatment programs. Establishes workgroup on juvenile justice facilities. Allows the reinvestment of savings from closing facilities into communitybased accountability and treatment programs. Establishes workgroup on juvenile justice facilities. Research Funds biotech spinoff program. $60.0m Pays for a new higher education research initiative aimed at commercialization (also proposes $100m from bond package). $40.0m Pays for a new higher education research initiative aimed at commercialization (also proposes $65m from bond package). $30.5m Funds the Virginia Research, Development, and Commercialization Fund as part of GO Virginia (also proposes $20m from bond package). $40m Expands funding for Virginia Bioscience Health Research (VBHRC). $12.5m but with less funding. $2.5m Does not expand funding for Virginia Bioscience Health Research (VBHRC). Increased funding for other research programs. $26.9m Increased funding for other research programs. $0.2m Increased funding for other research programs. $10.9m Economic Development Creates GO Virginia to encourage regional collaboration between business, education, and government organizations. $38.4m but with more funding. $38.9m but with less funding. $32.5m Funds new JLARC unit for economic development oversight. $0.6m Increases funding for the Governor s Motion Picture Opportunity Fund. $1.2m but with more funding. $3.2m but with more funding. $5.7m New or increased funding for other programs and grants. $53.6m New or increased funding for other programs and grants. $45.9m New or increased funding for other programs and grants. $29.7m

Key Budget Policy Choices

Key Budget Policy Choices The and committees have released their proposed to the 2018-2020 budget (FYs 2019 and 2020). The baseline for these is the FY 2018 budget as approved in Chapter 836, Acts of Assembly 2017. The chart below