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Statement of Governor Terence McAuliffe on 2015-2016 Budget Actions

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Good Morning.

Over the past six days, my finance team and I have carefully reviewed the Biennial Budget that was transmitted to my office last Sunday by the General Assembly.

This budget was completed almost three months late, after the Republican leadership of the House of Delegates stubbornly refused to take even the most modest steps toward closing the health care coverage gap.

Virginians in every corner of the Commonwealth know that the lack of health care is hurting families, stunting economic growth, damaging hospitals and clinics, and causing too many of our citizens to suffer needlessly.

It is unconscionable that one of the wealthiest states in one of the wealthiest nations in the world does not provide health care to its needy citizens, particularly when we have already paid for it.

Providing health care to people who are sick is a moral imperative.

Time and time again, a bipartisan coalition in the Senate and I offered the House Republicans the opportunity to compromise. They had the chance to come to the table and help fix this serious problem, and every single time, they said NO.

When I took the oath of office in January, I had just come off a campaign in which I ran and won on a platform of expanding Medicaid services to 400,000 Virginians.

This was a program just like 27 other states have enacted.

Some of the most conservative Governors in the nation have implemented this program. Not only did the Republican leadership refuse to compromise, they refused to even discuss the issue.

My team and I then worked very closely with Republican members of the Senate on a compromise plan called Marketplace Virginia.

As with any compromise, I didn't like every part of Marketplace Virginia, but I knew that it was our best chance to get a plan through the House of Delegates, and to thereby help those Virginians who desperately need health care.

Presented with the idea of Marketplace Virginia, the Republican leadership of the House of Delegates responded with a resounding NO.

Again, they rejected compromise.

When the General Assembly failed to complete its work on time and adjourned March 8th without a budget, I offered yet another compromise.

I proposed to close the health care coverage gap with a two-year pilot program and received a written commitment from the U.S. Department of Health and Human Services affirming that Virginia could withdraw from the expanded program at any point we wanted with no ongoing obligation to the beneficiaries.

Once again, the Republican leadership of the House of Delegates said NO and refused to compromise.

They chose instead to subject our citizens to a protracted budget stalemate that was unfair to local governments, veterans, law enforcement officers, our state workforce and most importantly the vulnerable men, women and children who depend on state government for important human services.

Then, last Thursday night, after the Senate of Virginia acceded to the demands of the House to "decouple" health care from the budget, and to drop Marketplace Virginia completely, the House again said NO.

Together with their new-found majority in the Senate, House Republicans demanded an amendment that effectively eliminated the Medicaid Innovation and Reform Commission or MIRC as a vehicle for closing the coverage gap.

By refusing any and all compromise, the House leadership has turned its back on people all over Virginia who were looking to us to help them and their families gain access to life-saving treatments and medicine.

By refusing any and all compromise, the Republican leadership has elected to forfeit more than $5 million per day in funding that our people have already sent to Washington.

We have already lost $852 million as of this morning.

This is the context in which I had to evaluate this budget.

It was long overdue.

It failed to address health care -- one of the most pressing needs of our people.

And it contained reductions in spending that were much deeper than necessary because the General Assembly refused to accept Medicaid funding.

Frankly, if it were not June 20th -- with only 10 days left in this fiscal year, I may well have vetoed the entire budget. But given the severe difficulties the General Assembly had in getting even this weak budget to me, I seriously doubt that they could have prepared a budget in the next week without disrupting or imperiling critical services or jeopardizing our AAA Bond Rating.

Let me be crystal clear, I am moving forward to get Virginians health care.

I intend to sign this legislation, but not without using my constitutional authority to make several line item vetoes. Today, I am announcing that I will be vetoing several items in this budget:

First, I am vetoing the MIRC entirely. It is increasingly clear to me that the MIRC is merely a sham to pretend that the legislature is serious about Medicaid reform and expansion. Even the former Attorney General questioned its constitutionality.

My administration will continue to press for and achieve greater efficiency in Medicaid and other health care delivery programs. My administration has demonstrated time and time again that we will work with anyone in the General Assembly -- Democrat or Republican -- to advance these goals.

What we will NOT do is waste any more time on a process in which:

the needs of real people are not even discussed;
the metrics of reform are ignored; and,
the goal posts are moved or even uprooted constantly.
I have instructed Secretary Hazel and Secretary Brown and their teams not to attend or assist with any more meaningless MIRC meetings.

Second, I am vetoing the Stanley floor amendment because it is unnecessary given that there is no appropriation for expanded Medicaid pursuant to the Affordable Care Act.

It restricts something that doesn't exist.

With respect to health care, I am moving forward. There are several options available to me.

I have directed Secretary Hazel to work with our federal partners in Washington, the insurance industry, health care providers, our university medical centers, non-profit organizations, our local health departments, and the hospital industry to extend the promise of health care to our people.

Secretary Hazel will have a plan on my desk by no later than September 1st detailing how we can move Virginia health care forward even in the face of the demagoguery, lies, fear and cowardice that have gripped this debate for too long.

Third, I am vetoing funding for all new judgeships in which confirmation is limited to a regular or special session of the General Assembly. This language is plainly an attempt to significantly limit the power of the Governor and is thus unacceptable.

Fourth, I am vetoing an appropriation that will allow Chesterfield County to partner with the City of Petersburg to address challenges confronted by the Petersburg schools. This presents a number of legal problems and bad precedents, and was not requested by either locality.

Fifth, I am vetoing the item that would take $4.6 million from the Federal Action Contingency Trust (FACT) fund. My intent would be to use some or all of this money to protect our interests in military facilities that may otherwise be at risk of federal cut backs.

I will not sit idle and allow the General Assembly to cripple our military assets.

Sixth, I am vetoing the appropriation for the newly created Virginia Conflicts of Interest and Ethics Advisory Commission. The ethics reform bill passed by the General Assembly was far weaker than what Virginians deserve of proper ethics reform.

I plan to present revised legislation to the 2015 General Assembly session on this topic, and the creation of a new bureaucracy beforehand would be unwise and premature. I also question the constitutionality of the commission given its scope of responsibilities.

My Administration and their families live under a $100 gift band. Virginians deserve a General Assembly that gets closer to that standard.

Seventh, at the request of the Attorney General, I am vetoing language dealing with asset forfeiture settlements.

The Attorney General has indicated that while they are willing to continue to work on a possible resolution of issues, the adopted language will cause the Commonwealth difficulty in executing future settlements of this type. Put simply, the language is half baked and needs more work.

While not a veto, I have also directed the Department of General Services and other staff to suspend all activities to advance the replacement of the General Assembly building, the renovation of Old City Hall or the construction of the new parking deck near Capitol Square.

In my view, it simply sends the wrong signal to our people to be constructing expensive new facilities in Richmond at a time when we can't find $10 million to decrease homelessness.

My staff and I will continue to examine the budget through the weekend, and it is likely that we will have additional vetoes or amendments.

I appreciate the work that the money committee staffs have done and will continue to do on this budget during the weekend.

Finally, I want to thank Virginia's dedicated state workforce for their patience and continued hard work during this period of uncertainty.

It is our workforce that makes state government so effective and I am grateful to them for all they do.

Thank you.

Governor McAuliffe's Announced Budget Actions:

Governor McAuliffe intends to veto language authorizing the Medicaid Innovation and Reform Commission to Approve Medicaid reforms as a requirement for Medicaid Expansion (MIRC). The General Assembly made the Commission irrelevant by removing their appropriations authority from the budget. The MIRC has also consistently allowed partisan political considerations prevent action despite the criteria for Medicaid expansion having been fulfilled.

Governor McAuliffe intends to veto the amendment limiting any appropriation or expenditure of funds in the State Treasury to address the health care coverage gap without specific authorization or an appropriation bill enacted by the General Assembly on or after July 1, 2014. The amendment is unnecessary given its intent to restrict an appropriation that does not exist anywhere in the budget.

Governor McAuliffe intends to veto funding for all new judges to which the General Assembly has attached language limiting the Governor from making appointments when the legislature is out of session. The Governor's right to fill judicial vacancies when the General Assembly is out of session is key to keeping the judiciary running efficiently.

Governor McAuliffe intends to veto an appropriation that will allow Chesterfield County to partner with the City of Petersburg to improve the quality of Petersburg schools. The Governor is committed to improving underperforming schools, but he is concerned about the constitutionality of the legislation and neither locality requested the change.

Governor McAuliffe intends to veto an item that would revert $4.6 million away from the Federal Action Contingency Trust (FACT) Fund. This money is needed to help protect Virginia's military installations from federal cuts or potential actions of the Base Realignment and Closure (BRAC) Commission.

Governor McAuliffe intends to veto the appropriation for the newly created Virginia Conflicts of Interest Advisory Commission out of his concern over the weakness of the ethics legislation passed by the General Assembly. He intends to introduce stronger legislation in the next session, making the creation of a new bureaucracy premature and unwise.

Governor McAuliffe intends to veto budget language dealing with asset forfeiture settlements at the request of the Office of the Attorney General. The Attorney General has indicated that while they are willing to continue to work on a possible resolution of issues, the adopted language will cause the Commonwealth difficulty in executing future settlements of this type.

The Governor also announced that, in addition to his actions on the budget, he has directed the Virginia Department of General Services to suspend any actions on the new $300 million General Assembly Building in Richmond. He believes building new expensive offices for legislators to use part time is wrong when the General Assembly could not even find additional money to fight homelessness in Virginia.


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