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McDonnell proposes steep education, health cuts

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Gov. Bob McDonnell has proposed steep cuts to public education and health and human resources programs to help close the remaining $2 billion shortfall in the biennial budget.

“This is among the most difficult situations the legislature will ever have to deal with,” McDonnell said at a news conference announcing his proposed budget amendments.

McDonnell’s proposals include cutting public education by $731 million (primarily in noninstructional costs) and health and human resources programs by $316 million, mostly by cutting Medicaid, mental health staff and beds at state facilities and community health programs. McDonnell also proposes furloughing state employees five days in each of the next two fiscal years, reducing pay by about 2 percent.

McDonnell also restored some cuts proposed by former Gov. Timothy M. Kaine. Kaine had proposed about $2 billion in cuts while raising another $2 billion from an increase in the income tax. The House of Delegates unanimously defeated the income tax increase, requiring McDonnell and lawmakers to cut another $2 billion.

McDonnell wants the legislature to restore at least $60 million in public safety cuts, restore state employee contribution for the Virginia Retirement System for current employees and reinstate funding for a school technology program. His plans spare universities and colleges from further cuts.

Education

McDonnell says although his public education cuts are steep, localities will be able to recoup about $500 million through his proposals to reduce VRS costs. Those include eliminating the state-paid employee portion of VRS for state employees hired after July 1.

McDonnell’s education cut proposals focus primarily on noninstructional costs. Some of the biggest cuts include:

  • $225.8 million by freezing typical Standard of Quality base updates to support personnel costs; nonpersonal costs; public transportation; and costs associated with superintendents, school boards and school nurses. Instructional funding will be updated.
  • $130.1 million by excluding funding for supplemental salaries, such as extracurricular coaching, club sponsorships and stipends.
  • $91.9 million by eliminating support for noninstructional, lottery-funded programs, such as enrollment loss, mentor teacher, school breakfast and support school construction and operating costs.
  • $70.7 million by changing funding for nonsupport personnel.

Health and human services

McDonnell also proposes cutting health and human resources, another area Kaine was reluctant to cut. Some of the largest proposals include:

  • Eliminating coverage of consumer-directed personal and companion care services for Medicaid patients. ($62.9 million)
  • Reducing the income eligibility for Medicaid long-term care to $20,200 a year. This is expected to affect about 2,000 enrollees. ($53.3 million)
  • Freezing enrollment in the Family Access to Medical Insurance Security, which covers children and pregnant women up to the 200 percent of the federal poverty line. ($27.8 million)
  • Reducing staff by 449 positions at mental health facilities and reducing the number of mental health beds by 15 percent. ($26 million).
  • Reducing or eliminated state funding for a variety of health programs, such as social services departments, local dental services, assistance for unemployed two-parent homes, free medical clinics, and teen-pregnancy prevention.

State employees

Under McDonnell’s proposal, state employees could be required to take up to five days a year of unpaid leave, but would receive a 3 percent bonus at the end of 2011. The state would cover the employee contribution of the VRS payments but not pay for the employee contribution of state workers hired after July 1.

The House of Delegates and Senate are expected to introduce their budgets this weekend, which will then be sent to conferee delegates. McDonnell says he has been actively involved with the budget-writing committees and plans to work with them as they strive to reach a compromise on the budget.

“I expect some of these ideas will be accepted and some will be rejected,” McDonnell said Wednesday of his plans.

McDonnell has been criticized by some lawmakers for not announcing his budget amendments until now. The governor says he has been working alongside lawmakers to develop budget priorities and overcome the shortfall, focusing on “collaboration not dictation.”

McDonnell also announced Wednesday that corporate and recordation taxes had done better than expected in the first seven months of the state’s current fiscal year. He said this will reduce the current budget shortfall by $200 million over the remaining fiscal year and through the next biennium


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