BRADENTON, Fla. - Virginia Gov. Terry McAuliffe proposed a $109 billion two-year budget for state lawmakers to consider when their annual session starts in January.
The spending plan for the fiscal years 2017 and 2018 represents an 11% increase over the current biennial budget. State economists predict that revenues supporting the general fund will increase by 3% in 2017 and 3.7% in 2018.
McAuliffe, who outlined his budget for legislative finance committees Thursday, recommended placing $605.6 million in the revenue stabilization fund, bringing the balance to $845.3 million in 2017.
The budget proposal also includes a $2.43 billion bond package for education, workforce, and agency capital funding that McAuliffe had previously announced.
"Virginia's talent pipeline ties together our K-12, higher education, and workforce budgets and those investments are underscored by our $2.43 billion bond package," he said, calling the investment a "game-changing infusion of capital."
The budget also includes another $350 million of bonds for the Virginia Port Authority under the Department of Transportation. No bonds were proposed for other DOT programs.
If the governor's bond plan remains intact as the General Assembly considers its own version of the budget, it would provide the largest research-oriented funding in the Commonwealth's history and its largest investment in state parks.
Gilt-edged Virginia currently has $11.65 billion of outstanding tax-supported debt.
McAuliffe's budget recommendation also calls for increasing state education operating funds, and expanding Medicaid to cover an estimated 400,000 state residents who currently do not qualify for insurance under the Affordable Care Act, also known as Obamacare.
"Here in Virginia, we have a unique opportunity to craft a plan with no short- or long-term obligations to the Commonwealth," he said, referring to a proposed 3% tax hospitals would pay to cover the program. "This opportunity is within our reach thanks to our hospitals."
McAuliffe, a Democrat, said other states have seen budget savings from their expansion programs as they pulled down billions in federal funds.
McAuliffe pointed to Kentucky, where he said Medicaid expansion had positive impact on the state's general fund totaling $300 million dollars over two years.
Recently elected Kentucky Gov. Matt Bevin, a Republican, has said he plans to unwind the state's program, a development that McAuliffe did not mention in his written speech.
"The Virginia Chamber of Commerce and I have made the economic case that we are forfeiting $2.4 billion dollars in federal funds every year," McAuliffe said.
The governor linked some of the potential savings from expansion to corporate tax cuts that the GOP-dominated Legislature supports.
However, both chambers have already signaled their continued opposition to enlarging the state's health insurance program.
The Virginia General Assembly's session begins Jan. 13 and runs through March 12.
