Local legislators expect Assembly session dominated by money fights

The Virginia General Assembly will convene on Wednesday for what is likely to be a contentious session as lawmakers take up the two-year budget amidst a political battle over majority control in the state Senate.

Last week, Central Virginia’s representatives in Richmond shared their thoughts on the upcoming session. Many said that — as is usually the case — this year’s session will boil down to money.

Last month, Gov. Bob McDonnell unveiled a two-year budget proposal covering fiscal 2013-14 that totals nearly $85 billion. The governor has characterized the proposal as setting priorities by directing money toward core government functions and policies to spur economic development, without raising taxes. Democrats have criticized the bill as funneling money away from areas such as health care and K-12 education.

“The real fight this session is going to be — as it’s been the last few sessions — about the budget,” Del. David J. Toscano, D-Charlottesville, said Friday at a lawmakers’ luncheon hosted by the local chapter of the League of Women Voters. “The governor’s budget has certain things in there that some of us like, particularly initiatives that may help in job creation, and some in there that we don’t like, particularly transferring monies … used to pay for education, public safety, health care, the things a lot of folks think are core services of government, and moving that money out of that pot into another pot for transportation.”

Toscano, a former Charlottesville mayor and city councilor, is returning to Richmond this year with a higher profile after Democrats unanimously elected him to serve as House minority leader. He characterized the state Capitol in 2012 as a “much more conservative place” than in recent years.

Last year’s elections have resulted in a 20-20 split between Republicans and Democrats in the Senate, and Lt. Gov Bill Bolling, a Republican, has said he will cast tie-breaking votes on some matters, but not all. Bolling has said he will assert the authority to vote on most matters, but he plans to refrain from voting in situations that constitutionally require a majority of “elected” members to pass, a category that includes the budget and judicial appointments.

With Republicans already in control of the executive branch and the House of Delegates, gaining control in the Senate essentially puts the GOP in the driver’s seat of state government.

“I think we’ll see a lot of social legislation introduced, especially in the House,” Toscano said. “It’s hard to know what’s going to happen with it. It used to be that it would go over to the Senate and a lot of it would be killed. The Senate looks a little bit different now, so we don’t know what will happen with that.”

Sen.-elect Bryce Reeves, R-Spotsylvania, is partly responsible for the new-look Senate after he defeated longtime Democratic incumbent Edd Houck by a razor-thin margin in the 17th District.

Reeves also attended Friday’s luncheon, where he listed job creation, budget-process transparency and streamlined government as Republican priorities.

When a luncheon attendee asked why budgetary discussions were focused on where to cut rather than where to find more revenue, Reeves answered by saying his constituents are facing enough financial hardship as it is.

“If you’re referring to taxes, there’s not going to be any new taxes. Not in the governor’s bill,” Reeves said. “… Throughout the campaign, the people that I’ve met in our district, specifically more in the rural areas, they’re 30 days from the street. It’s all they can do to hold their home, to keep their jobs. And $40 might not sound like a lot amongst some of us in this room, but to some folks, that’s everything. To take more money out of their pocket at this time, I’m not going to vote for it.”

In an interview, Sen. R. Creigh Deeds, D-Bath County, characterized McDonnell’s proposal as “basically shifting money around,” and suggested it could result in higher taxes at the local level.

Deeds specifically criticized McDonnell’s decision to direct a $2.2 billion infusion to the state’s underfunded public employee pension system, or Virginia Retirement System, about half of which would be paid for by city and county governments.

“That proposal itself is not bad, but he’s basically putting part of the responsibility of those payments on local governments. Local governments are squeezed,” Deeds said. “… When you pass on part of the burden to local governments, who then have to raise taxes to raise the money, that’s a little cowardly.”

Funding the VRS

Del. Rob Bell, R-Albemarle, said reforming the Virginia Retirement System should be a top issue throughout the session.

“It is difficult to overstate how big a deal this is … The VRS fund is $19.9 billion underfunded … The entire general fund of Virginia is less than $19 billion,” Bell said. “So if you stop paying the payments to the schools, stop paying the money to [the University of Virginia], stop paying the money to the prisons, the state police, Medicaid … all of those things for a year, that is how big the hole is.”

Bell, who recently announced that he’s running for state attorney general in 2013, deflected the Democratic criticisms of McDonnell’s budget, saying it reflects the realities of setting fiscal policy under difficult circumstances.

“This budget is built, essentially, on the same numbers as the 2007 budget,” Bell said. “And that presents challenges … There’s been some population growth, there’s been some inflation, and there’s increased costs for Medicaid. What you’re seeing are just the challenges that come from building a budget in tough economic times.”

Shifting school money

A local controversy is already brewing over a budget amendment Bell plans to re-introduce that would change how state education dollars are distributed to schools in Charlottesville and Albemarle County. Bell’s amendment would adjust the composite-index formula the state uses to allocate education funding to take into account the revenue-sharing agreement between the city and the county.

The Charlottesville School Board opposes the amendment. Board Chairman Ned Michie has said it could result in up to $2.5 million being taken from city schools to go toward county schools.

Bell defended the idea at the luncheon, saying that the state doles out education money based on a locality’s “ability to pay.”

“What they do is they look at how rich each county is and how much property they have and the revenue streams and that’s how they come up with ability to pay,” Bell said. “Here’s the problem. This very substantial line-item in the Albemarle County budget, that every year they give $18 million to the city, is not included in ability to pay. And that’s the issue.”

Bell said he’s “guardedly optimistic” that the amendment will pass, but other area lawmakers balked at the proposal.

“I don’t have a problem if you’re somehow trying to fix the situation for Albemarle, and not taking the money directly from Charlottesville,” Deeds said. “But that deal undoes a deal that was agreed upon years ago. I don’t know how the legislature constitutionally does that. That needs to be resolved between Albemarle and Charlottesville.”

“To tweak the composite-index formula in a way that benefits one unique jurisdiction to the detriment of another unique jurisdiction may be a hard pill for some legislators to swallow,” Toscano said.

Reeves said that though he’d like to see the city and county solve the issue themselves, that’s not likely to happen.

“I think this is an issue that the city and the county can’t resolve on their own,” Reeves said. “And I think it’s going to take some intervention. I think Rob knows the issue very, very well.”

The regular session of the 2012 General Assembly will conclude on March 10.

When asked what policies might receive bipartisan support in Richmond this year, Toscano didn’t skip a beat.

“I think there’d be bipartisan support for the idea of adjourning on time.”