Tuesday, February 12, 2019

The State Budget Process In Virginia- Where Are We Now?

Right now the General Assembly is not only in the middle of their work on over 2500 bills, they are also in the middle of work on the budget. I am devoting today's post to the budget process and providing information on where and what we can expect. There is a lot of misinformation out there, so this seems like a good way to clear it up. If you learned something from reading today's post, please share it with your network. We need to understand the process in order to advocate for what we need.

Virginia operates on a two year budget called the Biennial Budget. This two year budget is developed during the even-numbered General Assembly sessions. The session is longer in even years so that the extensive budget work can be completed. We are currently operating under the 2018-2020 biennial budget. It was adopted in May of 2018. The process always starts with the Governor who proposes a two year spending plan that maps out his (or her's one day) budget priorities for the next two years. The Governor's Introduced Budget is the starting point from where the House and Senate begin. The House and Senate "Money Committees", which are the House Appropriations Committee and the Senate Finance Committee, work from the Governor's introduced budget and craft their own version of the biennial budget. They are always different with different approaches and different spending priorities. These budgets are actually introduced as bills that go to the floor of each body for debate and, ultimately, passage. There is a House Budget Bill and a Senate Budget Bill. Once each passes their body of origin, they cross over to the other body. Unlike non-budget bills, they are introduced and debated in their body of origin after the official "crossover" date for all the other bills.

When the budget bills cross over to the other body, they will be rejected. The House prefers their budget and rejects the Senate's, the Senate prefers their budget and rejects the House. When you have two bills that do the same thing (fund the Commonwealth for the biennium) and each body has passed one version of the bill and rejected the other, there is disagreement on the bill. That forces the creation of a smaller committee, made up of money committee members, from each body and from each party. This is called the Conference Committee and the members are the Budget Conferees. The real decision on budget rests with these legislators and they often become the key targets for budget advocacy efforts.

Once there is an agreement, the conference budget will go to the floor of each body for adoption and then crossover. This time they will have the same language and there will be agreement in both bodies to pass the bill. That usually happens on the last day of the regular session and is the last action taken during session. Once they pass the biennial budget, they adjourn. Last year the budget conferees could not come to agreement by the last day of session, so they adjourned without a budget and reconvened in April to try to come to agreement. The process took quite a while last year because of disagreement on Medicaid expansion, and we didn't heave a final budget until late May. The Governor takes action on the budget by signing or making recommendations that the General Assembly can take up when they reconvene 6 weeks after the regular session ends. That is called the "Veto" or "Reconvened" session. Once the Governor signs the bill, we have our two year budget.

So this is an odd year. Why are we battling over a budget you ask? Because the General Assembly takes up the budget every session. In odd numbered years, the General Assembly makes AMENDMENTS to the adopted biennial budget based on changes in revenue and forecasts. The process mirrors the biennial budget process, but we are only working with amendments, which are additions or changes, to the two-year budget. Since they are only making updates to an adopted budget, these are short sessions.

In December, the Governor announced his amendments to the biennial budget. These changes were largely based on revenues coming in higher then forecast and on changes to tax policies that the Governor assumed would pass. The House and Senate money committee leadership has rejected those tax policy changes, so they have fewer new revenues to work with. The House and Senate presented their budgets just a few days ago. Since then each body has passed their amendments and the bills have crossed over to the other body. They have not rejected the other body's budget, yet, but they will. That will lead to a conference committee. The House has already announced their budget conferees who will represent the House and they are Delegates S. Chris Jones (R-Suffolk), Steve Landes (R-Augusta), Chris Peace (R-Hanover), Barry Knight (R-Virginia Beach), Scott Garrett (R-Lynchburg), Luke Torian (D-Prince William), and Mark Sickles (D-Arlington). The Senate has not yet named their conferees as they wait to do that until after they reject the House budget. We will know who they are today or tomorrow. Once that happens all focus will shift to them and their work. Conference does not happen in open committee meetings, so we won't see their progress. We will see the final budget (with details usually leaking before hand) in the final days of the session. Keep in mind these are amendments to the Biennial Budget adopted in 2018.

So if all that wasn't enough, I could spend time talking about fiscal years (July 1-June 30 in VA, we are currently in FY19) and caboose budgets. I won't,  but know that while we operate under one budget at a time, over the course of the biennium we actually deal with 12 budget proposals and the work never ends.

Later today I will post information in the current House and Senate budget amendment proposals.