For Immediate Release: February 17, 2017
Contacts: Office of the Governor: Brian Coy, Brian.Coy@governor.virginia.gov

Governor McAuliffe’s Letter to General Assembly Budget Conferees

 

Today Governor Terry McAuliffe sent the following letter to the General Assembly Budget conferees outlining his position with respect to ongoing negotiations on the state budget:

February 17, 2017

The Honorable Emmett W. Hanger, Jr.
Co-Chairman, Senate Finance Committee
General Assembly Building, Room 326
Richmond, Virginia 23219

The Honorable Thomas K. Norment, Jr.
Co-Chairman, Senate Finance Committee
General Assembly Building, Room 626
Richmond, Virginia 23219     The Honorable S. Chris Jones
Chairman, House Appropriations Committee
General Assembly Building, Room 948
Richmond, Virginia 23219

           

Dear Chairman Hanger, Chairman Norment, and Chairman Jones:

I want to express my sincere thanks to each of you for your efforts and dedication to the citizens of the Commonwealth. I commend you for your hard work and commitment to prudent and sound fiscal planning, which is reflected in both the House and Senate versions of the proposed budget. 

I appreciate the priority that your amendments place on keeping our fiscal house in order by maintaining conservative revenue estimates and by not raising the revenue forecast. This commitment, along with establishing a Revenue Cash Reserve to guard against short-term revenue shocks, will help to ensure that the Commonwealth has the cash on hand to address potential negative impacts from sequestration, hiring and pay freezes for the federal civil service, the repeal of the Affordable Care Act, or other federal actions.

As I have stated on many occasions, I continue to be proud that we can work together and find common ground on issues that are important to the citizens who elected us to solve problems and improve their lives. Going into this session, compensation for our hard-working state and state-supported local employees was at the top of our priority lists. I am pleased that the House and the Senate have agreed upon a compensation package for state employees that demonstrates our commitment to them. While each chamber has chosen its own method for addressing teacher compensation, I applaud both for keeping our teachers in the mix for discussion during conference.  I look forward to seeing how you ultimately will reward these dedicated public servants in the final budget.

I am especially pleased to see that we agree on the need to protect public education from any programmatic reductions in funding. Public education is the backbone of a growing economy and our collective actions have demonstrated its priority and our shared commitment to protect public education from the effects of slow revenue growth.

Likewise, I thank you for agreeing to include additional funding for mental health services.  The needs in this area are significant and we have just begun the process of reforming our system.

There are other examples of where we have found common ground and protected core services; however, there are a few areas where we do not have consensus. I have limited my requests to those issues that are my highest priorities, and have focused my guidance on specific amendments in your respective budgets.  The attached document outlines the details of these issues.  In addition, my Secretaries will be contacting you about other issues that I ask you to consider in your conference deliberations. 

My highest priorities include requests to provide additional funding to address mental health services in local jails, and to provide the resources for the Board of Corrections to conduct reviews and investigations of major issues in local and regional jails, such as the death of an inmate.  In addition, given the experiences of the most recent election, I think we can agree that we need to strengthen our elections process. To effectively address existing deficiencies in these areas, we will need the additional resources that I initially proposed. I ask that you reconsider my original budget amendments.

I also know we share the goal of building a new Virginia economy. For that reason, I ask that you reconsider your actions and restore support for growing and emerging economic opportunities in the Commonwealth, especially in the areas of solar and bioscience research.  Further, I have been clear and consistent in my message to you, the education community, and our citizens that we must grow a workforce that can take advantage of the opportunities in the burgeoning cybersecurity industry. The jobs are there, and the economic benefits to our Commonwealth will be real with every job that we fill. 

In 2016, Virginia experienced the highest number of work related fatalities in over a decade. The Virginia Occupational Safety and Health Program not only handles inspection and compliance, but provides businesses with training and education in order to prevent incidents that have tremendous social costs and impact a company’s bottom line. Funding positions to enhance training and ensure compliance is critical for both employers and employees in the Commonwealth.

Again, I applaud your support for the vast majority of my proposals.  The priorities I have outlined in this communication were central to the amendments I introduced in December and they remain priorities for me today. I realize that you will need to rearrange your spending priorities in order to support my requests to grow our economy in proven areas that we know will return dividends, and to protect the mentally ill who are incarcerated. There are several areas that should be considered as you deliberate these spending priorities including, but not limited to, the additional funding for the Jamestown/Yorktown Commemoration and GO Virginia.

I recognize that budgets are the product of collaboration and compromise.  Achieving the desired result requires that we work together and communicate.  We have enjoyed the shared successes that come from a commitment to such a process. As we approach the end of the session, I am confident that we can continue to operate in the best interest of the citizens of the Commonwealth. Let us work together to further align this budget with our mutual goals. 

Sincerely,

Terence R. McAuliffe

 

Enclosure

cc: The Honorable Janet D. Howell
The Honorable Stephen D. Newman
The Honorable Frank M. Ruff, Jr.
The Honorable Richard L. Saslaw
The Honorable Frank W. Wagner
The Honorable M. Kirkland Cox
The Honorable Thomas A. Greason
The Honorable R. Steven Landes
The Honorable John M. O’Bannon, III M.D.
The Honorable Luke Torian

 

Appendix
Issues for consideration by the Budget Conferees

 

Mental Health in Jails and Jail Death Investigations

Issue:  Funding for jail mental health assessments and jail death investigations

Governor's introduced budget:
Contains $4.2 million in general fund support to provide for training of jail staff in mental health screening and to provide grants to jails for mental health assessments. Also includes $200,000 and two positions for the Virginia Board of Corrections to review deaths and other major situations in local and regional jails.

House:
Eliminates the $4.2 million funding provided in the Governor’s introduced budget for screening and assessment. It also eliminates the $200,000 and the positions that the Governor provided to assist the Board in its review of deaths in local and regional jails.

Senate:
Eliminates the $4.2 million funding provided in the Governor’s introduced budget. It also reduces the funding to the Board of Corrections by $100,000 and eliminates one position.

Governor's Position:
During the month of June, 2016, a total of 6,554 inmates in jail were known or suspected to be mentally ill. That was approximately 16 percent of the entire jail population. The state would need $4.2 million in general fund support to train jail staff to identify mental health issues in inmates, provide in‐service training on advanced mental health issues, and provide grants for implementing or improving mental health assessments of inmates. Additionally, the $200,000 and two positions for the Virginia Board of Corrections will allow it to review and investigate deaths in local and regional jails. Currently, the Board has responsibility for general oversight of jails and for establishing minimum operating standards for local and regional jails. I believe we need staff with experience in jail operations to review deaths and make proper recommendations, especially in light of recent events. I ask that you restore the $4.2 million funding to better screen and assess mentally ill inmates in the jail. Without this funding, there is no assistance in this budget specifically for our jails in dealing with mentally ill inmates. I also urge you to restore the funding needed to support the Board and provide specific authority in the Appropriation Act for the Board to investigate deaths in local and regional jails.

Elections

Issue: Department of Elections

Governor's introduced budget:
Provides a total of $4.2 million, which includes $2.3 million to continue activities funded through the Help America Vote Act (HAVA); $1.0 million to make enhancements to the Virginia Election and Registration Information System (VERIS); $570,000 to maintain online services for overseas military and other overseas voters; $50,000 to print voter registration and absentee ballot applications; $217,869 and one full‐time equivalent position to improve local access to VERIS; $105,000 to fund a call center for the November 2017 election; and conversion of five contractors to full‐time equivalent positions.

House:
Concurs with the Governor's introduced budget.

Senate:
Eliminates $4.0 million of the $4.2 million provided in the Governor's introduced budget as well as six full‐ time equivalent positions. Maintained only $250,000 from the introduced budget to continue activities funded through HAVA.

Governor's Position:
Inadequate funding of our election system will only give rise to problems and issues that none of us want. I ask that the conferees support the House recommendation that maintains a total of $4.2 million and six full‐time equivalent positions.

Cybersecurity

Issue: Reduction of funding for cybersecurity initiatives

Governor's introduced budget:
Includes $480,000 to support cybersecurity summer camps for high school students, and level funding for the cybersecurity training and education initiatives approved by the 2016 General Assembly.

House:
Removes the $480,000 proposed for summer cybersecurity camps under the Department of Education (DOE), all funding ($280,000 in FY17 and $152,000 in FY18) provided in the 2016 General Assembly Session to formally establish a cybersecurity program director for the Virginia Community College System (VCCS) and to develop appropriate curriculum to help all of Virginia's community colleges to offer coursework in cybersecurity, and all second year funding ($500,000) provided in the 2016 General Assembly Session for the cybersecurity public service scholarship program under the State Council of Higher Education for Virginia (SCHEV).

Senate:
Reduces the proposed funding for the summer cybersecurity camps in half, from $480,000 to $240,000.

Governor's Position:
Cybersecurity is a rapidly growing industry, requiring many new employees. We already are having difficulty in filling a number of open positions in this area. Moreover, Virginia is poised to attract companies providing cybersecurity support, both through research and the graduation of students with cybersecurity degrees. Virginia needs to offer programs and incentives to generate these new employees or risk losing these jobs to other states. I ask that you restore all of the proposed funding for the cybersecurity summer camps and maintain the funding for cybersecurity training and education approved by the 2016 General Assembly. We simply cannot participate in the growth of this industry without a skilled workforce to meet jobspecifications.

Economic Development and Research

Issue: Hindering economic development opportunities

Governor's introduced budget:
Includes funding to continue: (1) $5.0 million in general fund support in FY 2018 for the Virginia Bioscience Health Research Corporation (VBHRC); (2) $20.75 million of general fund support (of which only $17.75 million can be used to attract new economic development opportunities because $1.0 million is designated for the ion collider project and $2.0 million is designated for the Port of Virginia Economic and Infrastructure Development Zone Grant) for the Commonwealth's Development Opportunity Fund (COF) in FY 2018; and (3) $500,000 in general fund support in FY 2018 to attract new and expand existing tourism and hospitality projects.  Also provides new funding as follows:

(1) $400,000 in general fund support in FY 2018 to support a recently‐announced initiative to promote tourism from India; and, (2) $1.1 million, also in FY 2018, to support development of the solar industry in the Commonwealth.

House:
Redirects $2.5 million of funding for COF to support a supplier grant for an aerospace engine manufacturer in FY 2018.

Reduces funding for VBHRC by $2.5 million in FY 2018. Eliminates funding to support the solar industry.

Eliminates funding to attract and support new and expanding tourism and hospitality projects.

Senate:
Reduces the general fund appropriation to support COF by $1.0 million in FY 2018. Eliminates funding to promote tourism between the Commonwealth and India.

Eliminates funding to support the solar industry.

Governor's Position:
The actions proposed by the House and the Senate hinder the Commonwealth's ability to seek new economic development and job creation opportunities by: (1) removing funds from the COF, a program that is nearly fully committed; (2) eliminating funds to promote tourism between Virginia and India, an initiative that was recently announced; (3) reducing funds for VBHRC, a successful program that the General Assembly began funding in FY 2013; (4) eliminating proposed funding to assist the growing solar industry; and, (5) eliminating existing funds for a program the General Assembly began funding in FY 2016 to support new and expanding tourism and hospitality projects.

The COF is one of Virginia's primary incentives to attract companies and create jobs. The proposed reductions to the Fund could have an immediate impact on projects for Virginia. The COF is needed to incentivize new and expanding companies in Virginia and has its own set of qualifying criteria. I ask that you retain the amount of funding for the COF that is included in Chapter 780, and was continued in the introduced budget.

Air India will launch nonstop service between Indira Gandhi International Airport and Washington Dulles International Airport. The newly announced air route, which is scheduled to begin in July, is estimated to attract an additional 30,000 tourist and business travelers and $30 million in total economic impact annually to the National Capital Region (Virginia, Washington, D.C., and Maryland). In 2015, the Capitol Region welcomed more than 122,000 visitors from India, more than a 25 percent increase from 2014 visitation figures, making India the fourth largest overseas market. Visitation to the Capital Region from India is expected to double by 2025.  The proposed funding is part of a three‐year, $1.25 million incentive.  The elimination of these funds jeopardizes this economic development opportunity.

The 2016 General Assembly provided $2.5 million in additional funding in FY 2018, bringing the FY 2018 total funding for VBHRC to $5.0 million.  The increased funds would support additional grants and provide for the development of infrastructure "tools", or investments, to facilitate bioscience research and commercialization in the Commonwealth. VBHRC creates stronger working partnerships between Virginia academic research universities, the biotechnology industry, and health delivery systems that lead to greater collaboration, and more movement of ideas and technology from academia to industry and health delivery systems. The goal is to create an environment that fosters relationships to make Virginia a leader in collaboration, innovation, startups and job creation. The proposed reduction in funding will adversely impact VBHRC's ability to reach this goal and the Commonwealth's ability to become a leader at translational research andcommercialization.

Similarly, Virginia is in a unique position to attract a captive solar industry. The industry has matured in both Maryland and North Carolina and looks to Virginia for expansion opportunity. Project costs are historically low and project economics are further bolstered by a Federal Investment Tax Credit (ITC). If Virginia does not act, the lack of state participation will result in lost opportunity.  I ask that you restore $1.1 million to support this potential growth industry in the Commonwealth. 

Lastly, the Virginia Tourism Growth Fund was established to grow tourism development projects in the Commonwealth. The program has been funded for the previous two years and has resulted in almost $18.0 million in capital investment and more than 50 full‐time jobs. The FY 2017 appropriation was obligated within the first few months, and some of the projects were prorated in order to fund as many projects as possible. Further, as many as 15 potential applicants have already expressed interest in the grant program for next year. I urge you to keep this program funded at the level included in Chapter 780, and continued in the introduced budget.

Other Issues

Issue: Occupational Safety, and Health positions

Governor's introduced budget:
Provided $1.53 million in additional general fund appropriation to fill 15 unfunded positions in the Department of Labor and Industry's Virginia Occupational Safety and Health (VOSH) compliance program, voluntary protection, and consultative services programs to allow the agency to maintain an adequate number of safety positions and enhance programs that encourage employers to operate a safe work environment.

House:
Removes $1.27 million of additional general fund dollars in FY 2018 intended to support hiring 15 unfunded positions in the Department of Labor and Industry's VOSH compliance, voluntary protection, and consultative services programs.

Senate:
Eliminates all of the proposed $1.53 million of additional funding in FY 2018 intended to support hiring 15 unfunded positions in the Department of Labor and Industry's VOSH compliance, voluntary protection, and consultative services programs.

Governor's Position:
In calendar year 2016, the Department of Labor and Industry investigated 43 workplace fatalities, a significant increase from the 31 in the prior calendar year. Funding and filling these new positions will help to preserve the VOSH program, maintain its effectiveness, and provide an increased measure of life/safety protection for Virginia’s workers through the identification and correction of workplace hazards and reducing or eliminating injuries, illnesses and fatalities. I ask that the budget conferees restore funding to the level proposed in the introduced budget.

Issue: Increase education and expand access to women's reproductive health

Governor's introduced budget:
Includes $6.0 million in the second year in additional federal Temporary Assistance to Needy Families (TANF) funding to support education and expanded access to women's reproductive health. This initiative will help to address financial and availability issues for Long Acting Reversible Contraception (LARC) in order to increase access to and utilization of highly effective methods of contraception.

House:
Eliminates $6.0 million from the federal TANF block grant in the second year for a pilot program to increase education about reproductive choices and expanding access to LARCs.

Senate:
Reduces $3.0 million from the TANF block grant for a pilot program to increase education and access to LARCs. The language limits the pilot program to expanding access to etonogestrel birth control implants and not to any other type of LARCs.

Governor's Position:
The proposed funding in the introduced budget would increase the availability and affordability of LARCs. This will help avoid unwanted pregnancies, reduce the number of abortions, and support healthy families across the Commonwealth. I ask that you restore this funding to the requested level. Further, I ask that you remove the Senate provision that only etonogestrel birth control implants be included in the pilot, to the exclusion of intrauterine devices.  IUDs are a long‐accepted, safe form of birth control and are highly effective in preventingpregnancy.

Issue: Transfer federal food programs from the Department of Health to the Department of Education and restore funding to Department of Health.

Governor's introduced budget:
Transfers the Adult and Child Care Food and the Summer Food Service Programs to the Department of Education (DOE). This amendment would also provide $130,455 from the general fund to continue to fund the partially funded positions that would remain at the Department of Health (VDH) after the programs are transferred to DOE in their entirety.

House:
Eliminates the proposed transfer of the Adult and Child Care Food and the Summer Food Service Programs from VDH to DOE. Restores funding transferred from VDH to DOE in the introduced bill to maintain administration of these programs with the same level of funding and positions as was found in Chapter 780.

Senate:
Agrees to transfer the Adult and Child Care Food and the Summer Food Service Programs from VDH to DOE, and corrects the position level for VDH by reducing the maximum employment level by 20 FTEs.

Governor's Position:
Transferring these food programs to the Department of Education will result in greater efficiency in administration. Providing general fund support for the remaining partially funded positions at the Department of Health will allow the other programs for which these employees are responsible to continue without interruption.  I ask that you conform the budget to the Senate version for this issue.

Issue: Allow consumer‐directed attendants to receive overtime pay for up to 56 hours

Governor's introduced budget:
Authorizes the Department of Medical Assistance Services (DMAS) to pay overtime compensation to attendants who are providing care under the consumer‐directed service option in the Medicaid waivers, and provides $8.5 million from the general fund and $8.5 million in federal funds for this purpose. This amendment replaces current language prohibiting overtime hours being worked by consumer‐directed attendants with language that allows DMAS to pay time‐and‐a‐half for up to 56 hours for attendants who work more than 40 hours per week.

House:
Restores language that prohibits Medicaid payment of overtime for consumer‐directed personal assistance, respite and companion services. In addition, language authorizing overtime beginning July 1, 2017, is eliminated along with funding of $8.5 million from the general fund and $8.5 million from nongeneral funds.

Senate:
Restores language that prohibits Medicaid payment of overtime for consumer‐directed personal assistance, respite and companion services. In addition, language authorizing overtime beginning July 1, 2017, is eliminated along with funding of $8.5 million from the general fund and $8.5 million from nongeneral funds.

Governor's Position:
Many patients who use the consumer‐directed service option would have no option other than enter an institution at a much higher cost to the state if they cannot obtain adequate home care. In many cases, this level of care requires more than 40 hours per week. I urge you to restore the funding and revert the budget language to the introduced version, to allow individuals with significant disabilities who require this level of care to remain out of an institution.

 

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