Session Newsletter (Feb. 25)
The 2013 Session of the General Assembly of Virginia is now complete, and conventional wisdom has been turned on its ear. Typically, in a state election year the legislature avoids major initiatives. Delegates and senators, who are on the ballot in odd numbered years (delegates every two years, senators every four) are leery of doing anything, including raising taxes, that will arouse strong feelings in an election year. The 2013 Session broke this trend. Two substantial accomplishments occurred, and the appreciation or blame lay with the House and the Senate, and the Governor.
Since 1986, no major initiative regarding transportation funding has passed. Instead the issue has been booted down the road like a can to future General Assemblies. Funding has dwindled to the point that the formulas which benefit rural counties are beneficial to no one anymore. State funding for secondary roads is insignificant. Projects linger because of insufficient funds. The most prosperous regions of the state have been crippled in traffic jams. Frankly, over the past ten or fifteen years, as the crisis has developed, both Democrats and Republicans have done a lot of talking about this issue but little of substance has been accomplished. Coming into this session, there was little reason to believe that the norm would change, but it did.
Right before the session, the Governor announced a transportation funding plan. As I have discussed for the past several weeks, the plan had merit and demerit. It raised some money for transportation, and moved a lot of shells around to make it appear revenue neutral. I was not overly critical of plan because I understood that it signaled that the Governor abandoned the approach he took in his campaign of funding transportation projects through gimmickry.
The House and the Senate took different approaches with the bill and ultimately produced a compromise that is too complicated, further balkanizes our transportation system by allowing Northern Virginia and Hampton Roads to raise their own money separate and apart from the Commonwealth’s funds, creates different levels of taxation for different fuels, penalizes owners of hybrid vehicles, and raises the sales tax, both in general and on the sale of automobiles. My friend Chap Petersen pointed out all of these deficiencies in explaining to the Senate why he would not vote for the bill. I agreed with everything Chap said, but I came to a different conclusion.
The final compromise ultimately will generate $880 million a year for state transportation projects. It will also generate between $300-$350 million for Northern Virginia and another $175-$200 million for Hampton Roads. While I agreed with everything Sen. Petersen said, I understand that legislating is about compromise. I knew the bill was imperfect, but instead of the flaws, I was captured by the possibilities. New funding will allow projects like the completion of the four-laning between Eagle Rock and Clifton Forge to finally have a chance. It will allow safety improvements to be made in the I-81 and US 29 corridors. It will replenish secondary road funding budgets at the local level.
And importantly, the legislation establishes for the first time a fixed source of revenue for rail and transit. The passenger rail service between Charlottesville and D.C. will remain viable. We are the first state in the nation to have a fixed source of state funding for rail and transit. This is a major accomplishment.
Because there were insufficient Republican votes in either the House or the Senate to pass the bill, the Governor and the Speaker needed Democratic support. The other major accomplishment of the session was that the Medicaid reform process began. This will ultimately provide health care to hundreds of thousands of Virginians. Senate Democrats held out on the transportation bill until we received the approval of the Governor for a proposal to reform and expand Medicaid. The agreements were nearly foiled by an opinion from Attorney General Ken Cuccinelli.
The budget conferees established a 12 member commission to approve expansion after the reforms had been implemented to ensure accountability, integrity and a focus on prevention. The plan will have built-in, reasonable limitations on non-essential benefits and includes provisions for patient responsibility to include reasonable cost sharing and active engagement in health and wellness activities to improve health and control costs. Finally, the plan stipulates Virginia can withdraw from Medicaid expansion in the event that federal funding drops below 90 percent of its costs. The language of the conference report initially gave the commission discretion to approve expansion after those reforms have been agreed to by the federal government. The Attorney General opined that that language provided for an unconstitutional delegation of authority from the General Assembly to a subset of the General Assembly. While lawyers can disagree about the constitutionality of the language, we sought at once to address any potential problems. The language was modified to require the commission to expand Medicaid once the reforms are in place. The Governor’s Secretary of Health and Human Resources is confident that the reforms will be agreed to by the federal government.
The bottom line is that conventional wisdom was foiled this session. The 2013 Session of the General Assembly accomplished two long-term goals for which I have advocated for years. We expanded health care services to the working poor. Improving access to health care will improve the workforce and, in doing so, improve Virginia’s economy. And we established a sustainable stream of revenue for transportation for at least ten years. The funding will allow us to make necessary repairs to our bridges and culverts, over 45 percent of which are structurally deficient or at risk of becoming so. It will allow us to move forward on projects that have been promised and not built for years. And, the compromise will allow us to unclog the traffic jams in metropolitan areas and to move more people through rail and transit.
The 2013 Session of the General Assembly was busy in other areas as well:
- Bills were passed to require photo ID at the ballot box. Just last year we required for the first time, that IDs be produced before voting. This process worked well in large part because the Governor ordered that new voter registration cards be sent out shortly before the election. There was no need for this change in my view and I voted against it. It still has to survive the scrutiny of the Governor and the Justice Department.
- State employees got pay increases, some for the first time in six years. In addition to a two percent increase effective July 25 of this year, employees with five or more continuous years of service will receive an additional $65 per year of service up to 30 years. State-supported local employees will receive a three percent increase effective August 2013. Funding is also provided for a three percent raise in July for faculty at our institutions of higher learning as well as flexibility for colleges and universities to provide other performance based adjustments for non-classified staff.
- Legislation passed getting tough on texting while driving. Now an infraction will be punishable by a $250 fine for the first offense and after that by a $500 fine. If one is found guilty of reckless driving and is texting during that time, they will have a $500 minimum fine.
- A bill passed to require titling and registration of mopeds.
- Bills were passed putting a single line into the Code of Virginia establishing that parents have a fundamental right to bring up their children as they see fit. I voted against this legislation, not because I do not believe it is correct, but I believe it is correct precisely. Unnecessary language placed in the Code can only have as its purpose mischief.
The General Assembly passed 1527 bills and resolutions out of the 2574 introduced. If you would like additional information about specific bills, feel free to contact me or go to https://lis.virginia.gov/lis.htm. It is my high honor to represent you in the Senate of Virginia. I am back at work at my regular job, practicing law. The General Assembly will reconvene on April 3 to consider the Governor’s amendments and vetoes of legislation, and also to elect judges. If you need to contact me prior to that time, feel free to call my Charlottesville office at (434) 296- 5491, my Hot Springs office at (800) 545-5899 or email me at [email protected].
Session Newsletter (Feb. 21)
The 2013 Session of the General Assembly will soon be history. Many issues have been addressed and changes, good and bad, have been made in the law. My own legislative agenda has met with success and failure. As we go into the last couple of days, a small amount of important work remains.
Transportation Funding Compromise
Transportation has not been addressed in a significant way by Virginia’s government since 1986. Both Democrats and Republicans have talked about the issue over the years with limited results. As a result, a huge number of our bridges and tunnels are structurally failing and our construction budget is almost bankrupt. This year we may finally see a breakthrough.
The Governor’s proposal introduced at the beginning of session met different fates in the House and Senate. The House adopted the major elements of his approach, while the Senate came forward with a bolder approach. The outline of a compromise is now in place. While the details have not been finalized, this could be a plan that will allow us to develop sustainable funding for transportation for a number of years to come. As a legislator, I am mindful we cannot allow the perfect to be the enemy of the good. There are components of the plan that individually would never get my support, including the ill-advised $100 surtax on hybrid vehicles. However, we have never been this close to adopting a plan to improve transportation funding.
The compromise will generate about $880 million by 2018, when it is fully implemented. The amount includes as much as $198 million from existing general fund sources. The plan eliminates the current 17.5 cent per gallon gas tax and replaces it with a 1.3 percent increase in the sales tax on motor vehicles, a 3.5 percent motor fuels tax at the rack, or wholesale level, and a 6 percent wholesale diesel fuel tax. The plan increases the state sales tax by 0.3 percent, which will be dedicated to support rail and transit, including Phase 2 of the Dulles Corridor Metrorail Project. The compromise is dependent to a large extent on passage of the federal Marketplace Equity Act (MEA), which would create a tax on internet sales. The Governor’s initial plan included this provision as well and assumed Congress would permit the states to retain the funds generated by the tax. The compromise stipulates that if Congress does not act by January 1, 2015, the wholesale gasoline tax will increase to 5.1 percent. In addition to raising revenues for transportation, the money generated from the MEA and the sales tax increase will also benefit K- 12 education. The plan is expected to generate over $200 million by 2018 for our public schools.
In my view, the plan is too complicated. Legislation should be transparent, and people should be able to understand easily the bill’s implications. In the beginning, the Governor’s plan attempted to raise money, without really raising money, for transportation. This plan contains an element of that approach: it eliminates the 17.5 cent per gallon gas tax, but it replaces it with a wholesale tax. The new tax will be a growing source of revenue as opposed to the per gallon tax. I am uncertain what effect, if any, the change in tax structure will have on gas prices. Despite my misgivings, this is a solution that appears to have the support of Democrats and Republicans, Delegates and Senators, and also the Governor.
We all need to recognize that politics is about compromise. I would prefer a less complicated and more transparent approach to funding transportation, one that has fewer conditions and moving parts. But this might be our best chance to accomplish something. The full text of the bill has not yet been released, and I look forward to reading the details.
Medicaid Expansion
The other major decision facing us as the General Assembly session winds down is Medicaid expansion. Under the Affordable Care Act the states have an opportunity to expand Medicaid coverage. For the first three years, the federal government will pay 100 percent of the cost, and over the next six years the federal government will pay at least 90 percent of the total cost of expansion. Over the initial six year period of Medicaid expansion, the federal government will invest $1.72 for every penny Virginia invests, which translates into $5 million in Virginia every day over the next six years. The investment, which will bring health insurance coverage to between 200,000 and 400,000 people, will create in excess of 30,000 jobs in the Commonwealth. In my view, we cannot afford to wait.
Most people agree that at some point we will have to expand Medicaid. The debate has revolved around whether reforms can be made that will ensure accountability and state control over how the money is spent. It is my understanding that the Governor’s Secretary of Health of Human Resources has spoken with the U. S. Department of Health and Human Services and is reasonably certain we can get these reforms enacted quickly. At this point, it is largely a debate over timing. The question of expansion may delay passage of the budget. In general, the House has taken a position that we should wait until the reforms are enacted to expand Medicaid. The Senate recommends expanding and reforming Medicaid simultaneously. The Governor’s position is consistent with the House of Delegates. In the next two days I hope this issue will come to a resolution so we can adjourn on time.
This past week saw the untimely death of former Delegate Chip Woodrum. I served with Chip during my years in the House and considered him a very close friend. He was among the smartest, most articulate people I have ever known and was a master legislator. Chip loved Virginia, the House of Delegates, and his hometown, Roanoke. He was a gentleman of the first order and leaves behind a loving family. Chip Woodrum will be missed. We are all better for having known him.
In these last few days of the regular 2013 Session of the General Assembly, do not hesitate to contact me if I may be of assistance or if you have any ideas or input you want to share. It continues to be a high honor for me to serve in the Senate of Virginia. I can be reached at [email protected] or (804) 698-7525. After adjournment sine die, I can be reached in Charlottesville at (434) 296-5491 or in Hot Springs at (540) 839-2473.
Session Newsletter (Feb. 12)
We are at a crisis in transportation. In years past Virginia’s highways were lauded as some of the best in the land. In fact, our system has traditionally been recognized as one of the best in the country. But not anymore. Something in excess of 44 percent of our bridges and tunnels are structurally deficient. Those faulty bridges and tunnels can be found throughout the Commonwealth, not just in Northern Virginia and Hampton Roads. The same can be said for deteriorating roads, traffic congestion, and underfunded public transit options.
We need a sustainable source of new funding for transportation. Experts tell us we need in excess of one billion dollars a year. The General Assembly has delayed action for years, and if we continue to do so, we run the risk of losing federal transportation funds. Those dollars must be matched, which we will not be able to do by 2017. Clearly, we have to do something.
This year, right before the session, the Governor put forth a plan. I have not been terribly critical of the plan for a couple of reasons. First, I lost to the governor in 2005 and 2009. Any criticism I make of his plan is likely to be seen as sour grapes or at least taken with a grain of salt. Second, I think the Governor’s prioritization of transportation is a huge step forward. While his plan is imperfect in my view, at least it is a plan and a starting point for working toward compromise and developing ideas that would force a solution. Now, in the closing days of the session, we are closer than ever to achieving a lasting transportation solution. In fact, we are poised to pass a plan out of the Senate. We do not need to have this discussion again in a year or two, or even five or ten. The final compromise should sustain our system for at least a generation.
Creigh Deeds with students from Piedmont Community College
Two major components of the Governor’s plan are flawed in this respect. The Governor’s proposal eliminates the 17.5 cent gas tax and replaces it with a 0.8 percent increase in the sales tax. He also has recommended taking around $200 million a year out of the general fund to pay for transportation.
The highway system was created under Harry Byrd’s leadership and funded initially with a three cent gas tax. It was the first step in the 20th century toward modernizing Virginia’s economy and creating opportunity in every corner of our Commonwealth. The gas tax was last raised in 1986. The 17.5 cents a gallon tax generates about $700 million a year.
The sales tax was created under Mills Godwin’s first term as governor to fund the new community college system. Over the years, the revenue has been used primarily for other general fund purposes: to fund higher education, K-12 education, health care, and public safety. The transportation package adopted in 1986 also increased the sales tax by 0.5 percent to fund our roads.
In the last four years, the Commonwealth of Virginia has cut funding for public education by over $1 billion. At the same time we have reduced direct aid to localities for K-12, we have required more of local governments and school boards. For example, just last year we increased the local responsibility for paying for teachers’ retirements which resulted in school systems in every corner of the Commonwealth having to look at cutting costs. Alleghany County considered closing two elementary schools. Through the leadership of the Board of Supervisors, the County came up with the funding to keep those schools open for a year. This year, Alleghany County is looking at closing three elementary schools. Alleghany is not alone. Rockbridge County has shut down schools. Albemarle County is considering closing schools. The same can be said for dozens of counties around the state.
All localities are facing significant fiscal pressure due to reduced funding from the state coupled with increased responsibilities. In that atmosphere, it just makes no sense to me to take upwards of $200 million a year from the general fund, money that could be flowing back to local schools, and spend it on roads. The bottom line is that when Virginia is shortchanging its general fund obligations, we have no business opening the general fund spigot to an area of endless need. By the same token, it makes no sense to me to raise a tax that has historically been used for general fund purposes for transportation. If the sales tax is to be raised, some or all of that money needs to go to education to take pressure off of the real estate tax at the local level.
In addition, it makes no sense to abolish the gas tax, a significant portion of which is paid by nonresidents who use our roads, and replace it with a sales tax, which is largely paid by Virginians. A more commonsense approach would be to replace the existing gas tax with a sales tax on gasoline, which will at least provide for some growth in revenues from year to year to help keep up with growing expenses relating to road maintenance and construction. If we are going to raise the sales tax, we should divide the money between higher education, K-12 education, and transportation, as proposed by Senator Dick Saslaw of Fairfax.
If we are going to use any portion of the general fund for transportation, the funds should be used for transit and rail. These modes of transportation are intended to move large numbers of people both short and long distances. Many public transit users lack access to private automobiles and reside in congested areas, where a reduction in private automobile use will lead directly to a reduction in costs related to highway maintenance and construction. Advocates for transit and rail have been demanding a fixed source of revenue for years. I propose that we agree to use general fund dollars.
Finally, the Governor’s plan does not produce enough revenue to do more than fund maintenance of highways. Those who wish for new construction projects will be disappointed in the plan. If we adopt the transportation proposal as written, not only would we be making bad policy decisions, we would inevitably be revisiting the subject of transportation funding within the next five years. We should not act simply to act. We must develop a meaningful compromise that will provide sustainable revenues for decades to come.
The Senate will consider a plan this week. Likely, an imperfect bill will pass. Then the real work will begin. Negotiations with the House and the Governor will determine the final product. Stay tuned.
It continues to be a high honor to serve you in the Senate of Virginia. If I can answer any questions or be of service in these last two weeks, please contact me. I can be reached at [email protected] or (804) 698-7525.
Session Newsletter (Feb. 8)
The 2013 Session of the General Assembly is rapidly winding down. This past week saw the crossover, when each side completes work on its own bills, and passage of the House and Senate budgets. We also saw an end to the redistricting conflict that has embroiled the Senate for the past three weeks.
On Wednesday, the 6th of February, the Speaker of the House ruled the redistricting amendments not germane to the House Bill to which they were attached. What this means is the amendments dramatically redrawing the Senate lines were not sufficiently related to the purpose of the original bill, which only made technical adjustments to House districts. The requirement that amendments be related to the original legislation ensures a more orderly process for considering legislation. I have known Bill Howell, the Speaker of the House of Delegates, for 22 years. He and I have often disagreed on policy, but I also know him to be a man of integrity. His ruling was entirely consistent with his past actions as Speaker.
While I am hopeful the Speaker’s ruling will allow us to use the last couple of weeks of the session to work constructively toward solutions to Virginia’s problems, I am not confident everyone feels that way. After hearing of the Speaker’s ruling, the Senate Republican Leader, Senator Tommy Norment of James City County, expressed disappointment and indicated he was confident that the 2015 elections would be held in the districts proposed in January. That sort of rhetoric indicates that redistricting remains unsettled. For what it’s worth, I am going to focus for the next two weeks on trying to find common ground on the many issues that face Virginia.
This past week also saw much discussion surrounding transportation. The General Assembly cannot continue to delay action on transportation, and I feel we are close to adopting a plan to meet our long-term transportation needs this year. The House passed a version of the Governor’s transportation plan, which was rejected in the Senate. Over the next the couple of weeks we have to develop a compromise.
Democrats have balked at the Governor’s plan for raiding the general fund of upwards of $200 million a year and for replacing the gasoline tax with a sales tax increase. Some Republicans have opposed any sort of tax increase for transportation. If we are going to be realistic about reaching consensus, both sides will have to give a little. For example, I think the Democrats may consider using general fund dollars for transit and for rail. After all, those forms of transportation are designed to transport a great number of people and have not seen a steady source of funding over the years.
I think we can also develop compromise around a number of proposals made by Senators Frank Wagner of Virginia Beach and John Watkins of Powhatan County. Sen. Wagner proposed scrapping the gas tax for an increase on the wholesale tax at the rack. The Governor’s proposal is dependent on the federal government passing an internet sales tax, which has been defeated twice before. Sen. Wagner’s plan would call for a larger wholesale tax in the event the federal legislation is defeated. Senator Watkins has made similar suggestions. Each of the proposals has components around which consensus can develop.
On the 7th of February, both houses passed versions of the budget. I voted for the Senate proposed budget, which passed 35-5. Medicaid expansion is the major point of contention between the House and Senate budgets.
Under the Affordable Care Act, Medicaid expansion is significant. The Supreme Court ruling that upheld the Act last year left to the states the determination whether to expand Medicaid. If we expand Medicaid, the federal government pays 100 percent of the cost over the next three years and 90-95 percent for the subsequent three years. The investment amounts to about $5 million a day. For every $1.76 the federal government invests in Medicaid expansion in Virginia, we have to invest about a penny. This expansion will add coverage to an additional 200,000 to 400,000 Virginians and create in excess of 30,000 new jobs in the Commonwealth.
The Senate’s approach makes a number of reforms that allow us to measure the performance of the expansion and build accountability into the program. Assuming those reforms can be made, we will establish a trust fund for the money we expect to save. The fund will buffer future costs we may incur. Medicaid expansion is a good deal for Virginia.
It continues to be a high honor to serve you in the Senate of Virginia. If I can answer any questions or be of service in these last two weeks, please contact me. I can be reached at [email protected] or (804) 698-7525.