David Toscano

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An Early Look at Budgetary Prospects for 2019

December 21, 2018 by David Toscano

Perhaps the most important action we take as legislators is to pass a biennial budget. This is done in the even-numbered years and it is then modified in the next year. 2019 will be the year of budget modification. Governor Northam recently presented his proposals for changes we can make in our two-year budget during our session beginning January 9, 2019. I was impressed by several developments:

1. The Virginia economy is booming. Unemployment now stands at 2.9% and our revenue forecast has improved dramatically. The state ended the fiscal year on June 20, 2018, with a surplus of approximately $550 million. Typically, surplus revenues are either saved for a future year or expended on one-time investments, such as buildings, roads, or other infrastructure.

Governor Northam presents his proposed budget December 18, 2018 Photo credit: Bob Brown, Richmond Times-Dispatch
Governor Northam presents his proposed budget December 18, 2018 Photo credit: Bob Brown, Richmond Times-Dispatch

2. The Commonwealth will likely have greater revenue in 2019 than originally projected. First, we are in position to take advantage of a court decision permitting the taxation of internet sales; this could generate another $145 million in general fund revenue, plus an additional $10 million for transportation improvements in Northern Virginia and Hampton Roads. Second, the Trump Tax Plan will have the effect of generating additional tax revenues for the Virginia budget. Projections on the amount vary, depending on the extent to which our efforts to refund some of these monies to taxpayers occur, but estimates range between $500-$600 million in additional monies for fiscal year 2019.

3. The Governor has proposed, and I support, providing some tax relief to those most impacted by the Trump Tax Plan and making targeted investments in critical initiatives to support all Virginians. The Governor has proposed about $200 million in tax relief. He has also proposed raises for public employees and teachers, $80 million in investments for school construction, $36 million to increase the number of mental health counselors in schools, almost $20 million for college affordability initiatives, $46 million to expand broadband in rural areas, and another $19 million in housing trust fund spending. In my view, these are prudent and necessary investments in services and infrastructure that our citizens need and desire.

4. The Governor is also proposing to save some of the additional revenues in a reserve fund in the event that there is a downturn in the economy. You can see further highlights of the Governor’s proposal here.  

Medicaid

We will have to account for a major increase in Medicaid spending for those who qualified for the program prior to expansion. The money supporting that expansion comes either from the federal government or from the provider assessment taxes imposed upon hospitals, but the increase in the budget is caused by an existing Medicaid population that is becoming older and sicker. We have adopted reforms that will hopefully cut costs, but have yet to see the results of these efforts.

Tax Cuts

When we arrive in Richmond in January, the budget debate will emerge as one of the most critical of the session. Some delegates would like to provide a larger tax cut that would impact not just middle- and low-income working Virginians as the Governor has suggested, but provide an additional benefit to wealthier taxpayers who have already taken advantage of the Trump Tax Plan. Please feel free to contact me with any views on this that you would like to share.

New Leadership

2019 House Democratic Leader Eileen Filler-Corn with newly elected Congresswoman Abigail Spanberger.
2019 House Democratic Leader Eileen Filler-Corn with newly elected Congresswoman Abigail Spanberger

As this year comes to a close, I again wish to thank you and so many others in our community who have supported me for these many years. My role as the Democratic Leader comes to a close on December 31, 2018, and I leave it with a good feeling in my heart, largely generated by all the support you have given to me and my family. While I do not intend to cut back on my role as an advocate for the values we consider important, I am so happy to turn over the Leader position to my dear friend and colleague, Eileen Filler-Corn, shown here with one of our new Congresswomen, Abigail Spanberger. Eileen will do a terrific job as we solidify our gains and move towards the majority in the upcoming election cycle.

Nancy, Matthew and I wish you and yours the best for this holiday season and in the year ahead.

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Filed Under: General Assembly 2019 Tagged With: Affordable Health Care, Education, Medicaid expansion, State Employee Compensation, Virginia budget, Virginia Higher Education Funding

Topics

2016 presidential election (5) 2017 Virginia election (12) ABC law enforcement procedures (5) Adoption (3) Affordable Care Act - Virginia (21) Affordable Health Care (61) Anti-Discrimination (18) Charlottesville and Albemarle County (14) Charlottesville sidewalk funding program (3) Climate Change (12) Coal Tax Credits (14) DNA Database Expansion (11) Domestic Violence (6) Education (40) Educational reform (4) Environmental Protection (48) Equal Rights Amendment (4) Ethics reform (11) Financial exploitation of elderly (6) Foster Care (3) Gun Safety (34) Immigration (15) Job Creation (11) Judicial Appointments (9) K-12 Education funding (30) Legislative Redistricting (23) Medicaid expansion (52) Mental Health Policy (17) Pre-K Education Funding (7) Religious Freedom (4) Renewable Energy (31) Reproductive Choice (16) Same-Sex Marriage (4) Senator Creigh Deeds (3) Sexual Assault Policy (10) Special Session (11) State Employee Compensation (16) University of Virginia (7) Virginia budget (34) Virginia General Assembly Process (28) Virginia Health Insurance Marketplace (11) Virginia Higher Education Funding (19) Virginia Retirement System funding (5) Virginia transportation (12) Voting Access (12)

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Topics

2016 presidential election 2017 Virginia election ABC law enforcement procedures Adoption Affordable Care Act - Virginia Affordable Health Care Anti-Discrimination Charlottesville and Albemarle County Charlottesville sidewalk funding program Climate Change Coal Tax Credits DNA Database Expansion Domestic Violence Education Educational reform Environmental Protection Equal Rights Amendment Ethics reform Financial exploitation of elderly Foster Care Gun Safety Immigration Job Creation Judicial Appointments K-12 Education funding Legislative Redistricting Medicaid expansion Mental Health Policy Pre-K Education Funding Religious Freedom Renewable Energy Reproductive Choice Same-Sex Marriage Senator Creigh Deeds Sexual Assault Policy Special Session State Employee Compensation University of Virginia Virginia budget Virginia General Assembly Process Virginia Health Insurance Marketplace Virginia Higher Education Funding Virginia Retirement System funding Virginia transportation Voting Access

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211 E. High Street
Charlottesville, VA 22902
Phone: 434-220-1660
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david@davidtoscano.com

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